Abbott highlights Texas AI boom, with Houston projects on the horizon

An aerial view of Stargate’s AI data center in Abilene. Photo courtesy OpenAI.

AI investments are booming in Texas, Gov. Greg Abbott says. And Houston is poised to benefit from this surge.

At a recent Texas Economic Development Corp. gathering in the Dallas-Fort Worth area, Abbott said AI projects on the horizon in the Lone Star State would be bigger than the $500 billion multistate Project Stargate, according to the Dallas Business Journal. So far, Stargate includes three AI data centers in Texas.

Stargate, a new partnership among OpenAI, Oracle, Softbank, and the federal government, is building AI infrastructure around the country. The project’s first data center is in Abilene, and the center’s second phase is underway. Once the second phase is finished, the 875-acre site will host eight buildings totaling about 4 million square feet with a power capacity of 1.2 gigawatts. An additional 600 megawatts of capacity might be added later.

On Sept. 23, Stargate announced the development of another five AI data centers in the U.S., including a new facility in Shackelford County, Texas, near Abilene. That facility is likely a roughly $25 billion, 1.4-gigawatt AI data center that Vantage Data Centers is building on a 1,200-acre site in Shackelford County.

Another will be in Milam County, between Waco and Austin. In conjunction with Stargate, OpenAI plans to occupy the more than $3 billion center, which will be situated on a nearly 600-acre site, the Austin Business Journal reported. OpenAI has teamed up with Softbank-backed SB Energy Global to build the facility.

Abbott said several unannounced AI projects in Texas — namely, data centers — will be larger than Stargate.

“Bottom line is ... when you look at diversification, the hottest thing going on right now is artificial intelligence,” Abbott said.

The Houston area almost certainly stands to attract some of the projects teased by the governor.

In Houston, Taiwanese tech manufacturer Foxconn already is investing $450 million to make AI servers at the 100-acre Fairbanks Logistics Park, which Foxconn recently purchased for a reported $142 million. The park features four industrial buildings totaling one million square feet. It appears Foxconn will manufacture the servers for Apple and Nvidia, both of which have announced they’ll open server factories in Houston.

The Foxconn, Apple, and Nvidia initiatives are high-profile examples of Houston’s ascent in the AI economy. A report released in July by the Brookings Institution identified Houston as one of the country’s 28 “star” hubs for AI.

The Greater Houston Partnership says the Houston area is undergoing an "AI-driven data revolution."

“As Houston rapidly evolves into a hub for AI, cloud computing, and data infrastructure, the city is experiencing a surge in data center investments driven by its unique position at the intersection of energy, technology, and innovation,” the partnership says.

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U.S. Congressman Jake Ellzey made the announcement in Dallas last week. Photo courtesy of Google

Google to invest $1B in data center tech, clean energy in Texas

coming in hot

Google is making a big investment in Texas to the tune of $1 billion.

According to a news release from the company, the tech giant will spend more than $1 billion to support its cloud and data center infrastructure and expand its commitment to clean energy.

The $1 billion will be spent on data center campuses in Midlothian and Red Oak to help meet growing demand for Google Cloud, AI innovations, and other digital products and services such as Search, Maps, and Workspace.

In addition to its data center investment, Google has also forged long-term power purchase agreements with Houston-based Engie, as well as Madrid-based entities Elawan, Grupo Cobra, and X-ELIO for solar energy based in Texas. Together, these new agreements are expected to provide 375 MW of carbon-free energy capacity, which will help support Google’s operations in Texas.

These agreements were facilitated through LEAP (LevelTen Energy’s Accelerated Process), which was co-developed by Google and LevelTen Energy to make sourcing and executing clean energy PPAs more efficient, and contributes to the company’s ambitious 2030 goal to run on 24/7 carbon-free energy on every grid where it operates.

The company has contracted with energy partners to bring more than 2,800 megawatts (MW) of new wind and solar projects to the state. Google’s CFE percentage in the ERCOT grid region, which powers its Texas data centers, nearly doubled from 41 percent in 2022 to 79 percent in 2023.

The initiatives were announced at a conference in Midlothian on August 15, attended by business leaders and politicians including U.S. Congressman Jake Ellzey, c, Ted Cruz, and Citi CIO Shadman Zafar.

The Dallas cloud region is part of Google Cloud's global network of 40 regions that delivers services to large enterprises, startups, and public sector organizations.

In a statement, Piazza said that "expanding our cloud and data center infrastructure in Midlothian and Red Oak reflects our confidence in the state's ability to lead in the digital economy."

Data centers are the engines behind the growing digital economy. Google has helped train more than 1 million residents in digital skills through partnerships with 590 local organizations, including public libraries, chambers of commerce, and community colleges.

In addition to its cloud region and Midlothian data center, Google has offices in Austin, Dallas, and Houston. The new Google’s total investment in Texas to more than $2.7 billion.

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This article originally ran on CultureMap.

According to a report from CBRE, Houston registered the eighth-most data center leasing in North America in first half of 2021. Photo by Christina Morillo/Pexels

Report: Houston sees uptick in data center leasing activity

by the numbers

Houston's data center market is electrified. In the first half of 2021, the local data center market saw the eight highest amount of leasing activity among the 17 North American markets tracked by commercial real estate services company CBRE.

In the first half of this year, the Houston data market experienced net absorption of 5.7 megawatts worth of capacity, up 119 percent from the first half of last year, CBRE says. Net absorption is a key indicator of leasing activity.

During the past year, Houston has added 5.1 megawatts of inventory, dropping the vacancy rate for data centers to 18.5 percent, according to CBRE.

"There have been a few large transactions in the first half of the year that added to Houston's increased absorption numbers," Brant Bernet, senior vice president in CBRE's Dallas office, says in a September 7 news release. "The major storyline for the Houston market is investor interest."

A handful of data center acquisitions already have occurred this year in the Houston area, and more could be on the horizon, Bernet said. Datacenters.com lists 20 privately owned data centers in the Houston area. Among all landlords, Dallas-based CyrusOne owns the most data centers in the Houston market — four.

In June, Las Vegas-based data center operator Switch completed its purchase of Austin-based data center company Data Foundry for $420 million. In Houston, Data Foundry operated two data centers totaling 370,000 square feet. At the end of 2021, Switch plans to develop more data centers in Houston and Austin that are set to open in 2023.

The smaller of Switch's two newly acquired data centers here is a 20,000-square-foot facility at 5555 San Felipe St. in West Houston. The larger one, encompassing 350,000 square feet, sits on an 18-acre site at 660 Greens Pkwy. in North Houston.

In March, Vienna, Virginia-based data center operator Element Critical purchased Skybox Datacenters' facility in Katy for an undisclosed amount. The more than 96,000-square-foot data center sits on 20 acres at 22000 Franz Rd. Skybox is based in Dallas.

A CBRE report indicates Houston's data center market remains dominated by international energy companies, finance companies, and regional health care providers. Demand comes largely from locally based companies.

Phillip Marangella, chief marketing officer at Herndon, Virginia-based EdgeConneX, is among insiders in the data center industry who are bullish about the future of data centers. EdgeConneX operates a 93,400-square-foot data center at 1510 Prime West Pkwy. in Katy.

"Data centers will be processing more workloads, more data, more video, more machine learning, and [will be] serving as facilitators for a global transformation in business, even smaller or more regional enterprises," Marangella tells Data Center Frontier. "Data centers are becoming part of an infrastructure fabric of capacity, connectivity, power, and proximity that is empowering enterprises to take advantage of the location, the scale, and the economics that work for them."

Data Foundry debuted its most recent expansion in North Houston, but that's just the start of the Austin-based company's growth in the Bayou City. Photo courtesy of Data Foundry

Data center in North Houston unveils newest expansion — with more growth planned

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Data Foundry Inc. may be finished with its 27,000-square-foot expansion at the company's data center in North Houston, but it's by no means finished growing at the site.

The Austin company's 18-acre, master-planned campus at 660 Greens Pkwy. allows for another 200,000 square feet. At build-out, Data Foundry will operate 350,000 square feet of space there.

Currently, the data center encompasses 150,000 square feet. The recent expansion completes the development's first phase. Each of two future phases will add 100,000 square feet.

So far, there's no timetable for the data center's second and third phases.

"It's all a function of demand. We will deploy the capital in response to the pace at which we end up filling up the new space," says Ed Henigin, chief technology officer of Data Foundry.

The 27,000-square-foot expansion debuted in late January at Data Foundry's Houston 2 Data Center. Henigin says space remains available there, but the company does have prospective tenants in the pipeline. It could take anywhere from six months to four years to lease the entire expansion, he says.

Data Foundry says increased customer demand along with business growth in Houston — especially in the healthcare, energy, and manufacturing sectors — prompted the four-megawatt expansion.

"For folks who are outside of Houston, it's an underappreciated market," Henigin says. "It's a huge economy, and there's a lot of dynamic activity happening in Houston and a lot of growth."

Generally, demand for data center space in Houston is "steady and healthy," Henigin adds.

"I don't think we're really overserved or underserved at this point. I think we're pretty well-balanced," he says.

Henigin points out that demand can shift depending on the region's economic conditions, such as upswings or downturns in the energy sector.

"A lot of the folks who have businesses in Houston have learned to be a little cautious, because you don't necessarily know when the next dry spell is coming," he says. "So there's a lot of careful planning or careful execution in business practices in order to be resilient."

Although Houston ranks as the fifth largest metro area in the U.S., it's not among the country's 10 biggest data center markets, unlike Dallas-Fort Worth and Austin/San Antonio. According to DataCenterMap.com, 40 data centers operate in the Houston area. A number of the region's data centers are in North Houston, The Woodlands, and Katy, according to datacenterHawk.

Among Data Foundry's competitors in the Houston market are CyrusOne Inc., Skybox Datacenters LLC, and Stream Data Centers LP — all based in Dallas — and San Francisco-based Digital Realty Trust Inc., according to datacenterHawk.

Customers of Data Foundry's Houston 2 Data Center include Carrizo Oil & Gas Inc., FMC Technologies Inc., Marathon Oil Corp., and Mattress Firm Inc. — all based in Houston — and Galveston-based Moody National Bank.

Houston 2 offers a 185 mph wind-rated infrastructure and an elevation above the 500-year floodplain. During Hurricane Harvey, tenants didn't lose power or network service, or experience flooding, Data Foundry says.

Data Foundry has operated data centers in the Houston area since 2002. Its other Houston data center, inside the Marathon Oil Tower at 5555 San Felipe St., comprises 20,000 square feet.

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Rice to revolutionize lymphatic disease research and more news to know

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Editor's note: We're looking back at the five biggest innovation headlines from the second half of February 2026, which include exciting Rice research advancements and Apple doubling down on production in Houston. Below are the five most-read InnovationMap stories from Feb. 16-28, 2026.

1. Rice University lands $18M to revolutionize lymphatic disease detection

Rice University scientists are pioneering two technologies to better diagnose and treat complex lymphatic anomalies. Photo via Getty Images.

An arm of the U.S. Department of Health and Human Services has awarded $18 million to scientists at Rice University for research that has the potential to revolutionize how lymphatic diseases are detected and help increase survivability. Continue reading.

2. Tech giant Apple doubles down on Houston with new production facility

Apple doubles down on Houston with new production facility, training centerPhoto courtesy Apple.

Tech giant Apple announced that it will double the size of its Houston manufacturing footprint as it brings production of its Mac mini to the U.S. for the first time. The company plans to begin production of its compact desktop computer at a new factory at Apple’s Houston manufacturing site later this year. The move is expected to create thousands of jobs in the Houston area, according to Apple. Continue reading.

3. Houston startup debuts new drone for first responders

Paladin Drones has revealed its next-gen emergency response drone, Knighthawk 2.0. Photo courtesy Paladin.

Houston-based Paladin Drones has debuted Knighthawk 2.0, its new autonomous, first-responder drone. The drone aims to strengthen emergency response and protect first responders, the company said in a news release. “We’re excited to launch Knighthawk 2.0 to help build safer cities and give any city across the world less than a 70-second response time for any emergency,” said Divyaditya Shrivastava, CEO of Paladin. Continue reading.

4. XSpace adds 3 Houston partners to fuel national expansion

XSpace, an innovative commercial real estate company, has partnered with three Houston firms to help grow its footprint. Rendering via xspacegroup.com

Texas-based XSpace Group has brought onboard three partners from the Houston area to ramp up the company’s national expansion. The new partners of XSpace, which sells high-end multi-use commercial condos, are KDW, Pyek Financial and Welcome Wilson Jr. Houston-based KDW is a design-build real estate developer, Katy-based Pyek offers fractional CFO services and Wilson is president and CEO of Welcome Group, a Houston real estate development firm. Continue reading.

5. Houston doctor wins NIH grant to test virtual reality for ICU delirium

Dr. Hina Faisal will test the effects of VR games on patients coming out the ICU, thanks to a recent NIH grant. Photo via Getty Images.

Think of it like a reverse version of The Matrix. A person wakes up in a hospital bed and gets plugged into a virtual reality game world in order to heal. While it may sound far-fetched, Dr. Hina Faisal, a Houston Methodist critical care specialist in the Department of Surgery, was recently awarded a $242,000 grant from the National Institute of Health to test the effects of VR games on patients coming out of major surgery in the intensive care unit (ICU). Continue reading.

Houston startup debuts bio-based 'leather' fashion collection in Milan

sustainable fashion

Earlier this month, Houston-based Rheom Materials and India’s conscious design studio Econock unveiled a collaborative capsule collection that signaled more than just a product launch.

Hosted at Lineapelle—long considered the global epicenter of the world's premier leather supply chain—in the vaulted exhibition halls of Rho-Fiera Milano, the collection centered around Rheom’s 91 percent bio-based leather alternative, Shorai.

It was a bold move, one that shifted sustainability from a concept discussed in panel sessions to garments that buyers could touch and wear.

The collection featured a bomber-style jacket, an asymmetrical skirt and a suite of accessories—all fabricated from Shorai.

The standout piece, a sculptural jacket featuring a funnel neck and dual-zip closure, was designed for movement, challenging assumptions about performance limitations in bio-based materials. The design of the asymmetrical skirt was drawn from Indian armored warrior traditions, according to Rheom, with biodegradable corozo fasteners.

Built as a modular wardrobe rather than isolated pieces, the collection reflects a shared belief between Rheom and Econock in designing objects that adapt to daily life, according to the companies.

The collection was born out of a new partnership between Rheom and Econock, focused on bringing biobased materials to the market. According to Rheom, the partnership solves a problem that has stalled the adoption of many next-gen textiles: supply chain friction.

While Rheom focuses on engineering scalable bio-based materials, New Delhi-based Econock brings the complementary design and manufacturing ecosystem that integrates artisans, circular materials and production expertise to translate the innovative material into finished goods.

"This partnership removes one of the biggest barriers brands face when adopting next-generation materials,” Megan Beck, Rheom’s director of product, shared in a news release. “By reducing friction across the supply chain, Rheom can connect brands directly with manufacturers who already know how to work with Shorai, making the transition to more sustainable materials far more accessible.”

Sanyam Kapur, advisor of growth and impact at Econock, added: “Our partnership with Rheom Materials represents the benchmark of responsible design where next-gen materials meet craft, creativity, and real-world scalability.”

Rheom, formerly known as Bucha Bio, has developed Shorai, a sustainable leather alternative that can be used for apparel, accessories, car interiors and more; and Benree, an alternative to plastic without the carbon footprint. In 2025, Rheom was a finalist for Startup of the Year in the Houston Innovation Awards.

Shorai is already used by fashion lines like Wuxly and LuckyNelly, according to Rheom. The company scaled production of the sugar-based material last year and says it is now produced in rolls that brands can take to market with the right manufacturer.

Houston startup debuts leather alternative fashion collection in Milan

Houston clean energy co. secures $100M to deploy tech on global scale

Going Global

Houston-based Utility Global has raised $100 million in an ongoing Series D round to globally deploy its decarbonization technology at an industrial scale.

The round was led by Ara Partners and APG Asset, according to a news release. Utility plans to use the funding to expand manufacturing, grow its teams and support its commercial developments and partnerships.

“This financing marks a critical step in Utility’s transition from a proven technology to full-scale global commercial execution,” Parker Meeks, CEO and president of Utility Global, said in the release. “Industrial customers are no longer looking for pilots or promises; they need deployable solutions that work within existing assets and deliver true economic industrial decarbonization today that is operationally reliable and highly scalable. Utility’s technology produces both economic clean hydrogen and capture-ready CO2 streams, and this capital enables us to scale and deploy that impact globally with speed, discipline, and rigor.”

Utility Global's H2Gen technology produces low-cost, clean hydrogen from water and industrial off-gases without requiring electricity. It's designed to integrate into existing industrial infrastructure in hard-to-abate assets in the steel, refining, petrochemical, chemical, low-carbon fuels, and upstream oil and gas sectors.

“Utility is tackling one of the most difficult challenges in the energy transition: decarbonizing hard‑to‑abate industrial sectors,” Cory Steffek, partner at Ara Partners and Utility Global board chair, said in the release. “What sets Utility apart is its ability to compete head‑to‑head with conventional fossil‑based solutions on cost and reliability, even as it materially reduces emissions. With this new funding, Utility is well-positioned for its next chapter of commercial growth while maintaining the technical excellence and capital discipline that have defined its development to date.”

Utility Global reached several major milestones in 2025. After closing a $53 million Series C, the company agreed to develop at least one decarbonization facility at an ArcelorMittal steel plant in Brazil. It also signed a strategic partnership with California-based Kyocera International Inc. to scale global manufacturing of its H2Gen electrochemical cells.

The company also partnered with Maas Energy Works, another California company, to develop a commercial project integrating Maas’ dairy biogas systems with H2Gen to produce economical, clean hydrogen.

"These projects were never intended to stand alone. They anchor a deep and growing pipeline of commercial projects now in development globally across steel, refining, chemicals, biogas and other hard-to-abate sectors worldwide, Meeks shared in a 2025 year-in-review note. He added that 2026 would be a year of "focused acceleration to scale."

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This article originally appeared on EnergyCapitalHTX.com.

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