Texas continues to embrace the volatile and controversial digital currency. Photo via David McBee/Pexels

Texas has launched its new cryptocurrency reserve with a $5 million purchase of Bitcoin as the state continues to embrace the volatile and controversial digital currency.

The Texas Comptroller’s Office confirmed the purchase was made last month as a “placeholder investment” while the office works to contract with a cryptocurrency bank to manage its portfolio.

The purchase is one of the first of its kind by a state government, made during a year where the price of Bitcoin has exploded amid the embrace of the digital currency by President Donald Trump’s administration and the rapid expansion of crypto mines in Texas.

“The Texas Legislature passed a bold mandate to create the nation’s first Strategic Bitcoin Reserve,” acting Comptroller Kelly Hancock wrote in a statement. “Our goal for implementation is simple: build a secure reserve that strengthens the state’s balance sheet. Texas is leading the way once again, and we’re proud to do it.”

The purchase represents half of the $10 million the Legislature appropriated for the strategic reserve during this year’s legislative session, but just a sliver of the state’s $338 billion budget.

However, the purchase is still significant, making Texas the first state to fund a strategic cryptocurrency reserve. Arizona and New Hampshire have also passed laws to create similar strategic funds but have not yet purchased cryptocurrency.

Wisconsin and Michigan made pension fund investments in cryptocurrency last year.

The Comptroller’s office purchased the Bitcoin the morning of Nov. 20 when the price of a single bitcoin was $91,336, according to the Comptroller’s office. As of Friday afternoon, Bitcoin was worth slightly less than the price Texas paid, trading for $89,406.

University of Houston energy economist Ed Hirs questioned the state’s investment, pointing to Bitcoin’s volatility. That makes it a bad investment of taxpayer dollars when compared to more common investments in the stock and bond markets, he said.

“The ordinary mix [in investing] is one that goes away from volatility,” Hirs said. “The goal is to not lose to the market. Once the public decides this really has no intrinsic value, then it will be over, and taxpayers will be left holding the bag.”

The price of Bitcoin is down significantly from an all-time high of $126,080 in early October.

Lee Bratcher, president of the Texas Blockchain Council, argued the state is making a good investment because the price of Bitcoin has trended upward ever since it first launched in early 2009.

“It’s only a 16-year-old asset, so the volatility, both in the up and down direction, will smooth out over time,” Bratcher said. “We still want it to retain some of those volatility characteristics because that’s how we could see those upward moves that will benefit the state’s finances in the future.”

Bratcher said the timing of the state’s investment was shrewd because he believes it is unlikely to be valued this low again.

The investment comes at a time that the crypto industry has found a home in Texas.

Rural counties have become magnets for crypto mines ever since China banned crypto mining in 2021 and Gov. Greg Abbott declared “Texas is open for crypto business” in a post on social media.

The state is home to at least 27 Bitcoin facilities, according to the Texas Blockchain Council, making it the world’s top crypto mining spot. The two largest crypto mining facilities in the world call Texas home.

The industry has also come under criticism as it expands.

Critics point to the industry’s significant energy usage, with crypto mines in the state consuming 2,717 megawatts of power in 2023, according to the comptroller’s office. That is enough electricity to power roughly 680,000 homes.

Crypto mines use large amounts of electricity to run computers that run constantly to produce cryptocurrencies, which are decentralized digital currencies used as alternatives to government-backed traditional currencies.

A 2023 study by energy research and consulting firm Wood Mackenzie commissioned by The New York Times found that Texans’ electric bills had risen nearly 5%, or $1.8 billion per year, due to the increase in demand on the state power grid created by crypto mines.

Residents living near crypto mines have also complained that the amount of job creation promised by the facilities has not materialized and the noise of their operation is a nuisance.

“Texas should be reinvesting Texan’s tax money in things that truly bolster the economy long term, living wage, access to quality healthcare, world class public schools,” said state Sen. Molly Cook, D-Houston, who voted against the creation of the strategic fund. “Instead it feels like they’re almost gambling our money on something that is known to be really volatile and has not shown to be a tide that raises all boats.”

State Sen. Charles Schwertner, R-Georgetown, who authored the bill that created the fund, said at the time it passed that it will allow Texas to “lead and compete in the digital economy.”

___

This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.

"Texas is an energy leader and no one wants to see that change." Photo via Getty Images

Expert: Texas leaders need to expedite long-term energy solutions

Guest column

Soaring temperatures have arrived, and while Texans should be enjoying the return to normalcy, instead they're facing another energy crisis.

Many saw February's winter storm and severe power outages as a once-in-a-century problem, but these unusual events are becoming all too commonplace, despite the governor's directive to improve grid reliability. Last month, Texans were again being asked to conserve energy while lawmakers considered a slew of new regulations, some of which would cripple investments in renewable energy.

For three months following the storm, the Texas legislature debated how to prevent another energy crisis. We applaud our elected officials for resisting political pressure to wrongly blame and punish renewable energy, and we want to encourage them to continue with this forward-thinking strategy.

Texas is an energy leader and no one wants to see that change. We urge our representatives in Austin to take a comprehensive view of what went wrong during the winter storm and ensure that any new rules and regulations work in support of, and not against, the energy market as a whole.

Texas needs a long term, comprehensive plan – not just for preventing blackouts, but for a more sustainable state.

Hot weather in Texas is a given, but we're anticipating temperatures will continue to rise. A climatologist at Texas A&M University recently predicted that the state will see the number of 100-degree days double by 2036. Rather than take a step back, we need to move forward and prioritize renewable energy as well as other investments in sustainability to future-proof our state and our planet.

Prioritizing green energy will have a ripple effect on Texas' economy. As the country's leader in wind-generated electricity, Texas has already reaped the benefit of creating thousands of new jobs for the state. In 2019, it was reported that Texas had over 230,000 clean energy jobs. If our state leaders are committed to job creation, we want to see how they're supporting clean energy, as well as continuing to work on maintaining the grid in an effective, efficient way.

The energy market is complex and dynamic, but it’s a key player in our road to a sustainable future. 

Continuing to invest in renewable energy is one simple step our lawmakers can make to ensure our energy market is addressing the climate crisis — and that Texans aren't dependent on generators and gas-fired power plants which let the state down during Winter Storm Uri. This should be a priority. In a recent survey of 1,000 adults by OnePoll in May 2021 commissioned by Bulb, 74 percent of respondents stated Texas should continue to develop and invest in renewable energy and over half of respondents expressed that investing in more green, clean renewable energy is the most important environmental issue that needs to be addressed.

As we come out of the pandemic, we have a chance to do better, together.

Texas has had over $60 billion in renewable energy investment to provide low-cost electricity generation. And with the growing technology sector across the state, there'll be more opportunities for renewables in the future. Continuing to promote policies that pushed Texas to its leadership position will unleash even more investments and innovation, which is good for Texas, good for Texans and good for the planet.

------

Vinnie Campo is the general manager for Bulb U.S., a new type of energy company that aims to make energy simpler, cheaper, and greener by providing renewable electricity to its members from Texas wind and solar. He is based in Texas.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

​Planned UT Austin med center, anchored by MD Anderson, gets $100M gift​

med funding

The University of Texas at Austin’s planned multibillion-dollar medical center, which will include a hospital run by Houston’s University of Texas MD Anderson Cancer Center, just received a $100 million boost from a billionaire husband-and-wife duo.

Tench Coxe, a former venture capitalist who’s a major shareholder in chipmaking giant Nvidia, and Simone Coxe, co-founder and former CEO of the Blanc & Otus PR firm, contributed the $100 million—one of the largest gifts in UT history. The Coxes live in Austin.

“Great medical care changes lives,” says Simone Coxe, “and we want more people to have access to it.”

The University of Texas System announced the medical center project in 2023 and cited an estimated price tag of $2.5 billion. UT initially said the medical center would be built on the site of the Frank Erwin Center, a sports and entertainment venue on the UT Austin campus that was demolished in 2024. The 20-acre site, north of downtown and the state Capitol, is near Dell Seton Medical Center, UT Dell Medical School and UT Health Austin.

Now, UT officials are considering a bigger, still-unidentified site near the Domain mixed-use district in North Austin, although they haven’t ruled out the Erwin Center site. The Domain development is near St. David’s North Medical Center.

As originally planned, the medical center would house a cancer center built and operated by MD Anderson and a specialty hospital built and operated by UT Austin. Construction on the two hospitals is scheduled to start this year and be completed in 2030. According to a 2025 bid notice for contractors, each hospital is expected to encompass about 1.5 million square feet, meaning the medical center would span about 3 million square feet.

Features of the MD Anderson hospital will include:

  • Inpatient care
  • Outpatient clinics
  • Surgery suites
  • Radiation, chemotherapy, cell, and proton treatments
  • Diagnostic imaging
  • Clinical drug trials

UT says the new medical center will fuse the university’s academic and research capabilities with the medical and research capabilities of MD Anderson and Dell Medical School.

UT officials say priorities for spending the Coxes’ gift include:

  • Recruiting world-class medical professionals and scientists
  • Supporting construction
  • Investing in technology
  • Expanding community programs that promote healthy living and access to care

Tench says the opportunity to contribute to building an institution from the ground up helped prompt the donation. He and others say that thanks to MD Anderson’s participation, the medical center will bring world-renowned cancer care to the Austin area.

“We have a close friend who had to travel to Houston for care she should have been able to get here at home. … Supporting the vision for the UT medical center is exactly the opportunity Austin needed,” he says.

The rate of patients who leave the Austin area to seek care for serious medical issues runs as high as 25 percent, according to UT.

New Rice Brain Institute partners with TMC to award inaugural grants

brain trust

The recently founded Rice Brain Institute has named the first four projects to receive research awards through the Rice and TMC Neuro Collaboration Seed Grant Program.

The new grant program brings together Rice faculty with clinicians and scientists at The University of Texas Medical Branch, Baylor College of Medicine, UTHealth Houston and The University of Texas MD Anderson Cancer Center. The program will support pilot projects that address neurological disease, mental health and brain injury.

The first round of awards was selected from a competitive pool of 40 proposals, and will support projects that reflect Rice Brain Institute’s research agenda.

“These awards are meant to help teams test bold ideas and build the collaborations needed to sustain long-term research programs in brain health,” Behnaam Aazhang, Rice Brain Institute director and co-director of the Rice Neuroengineering Initiative, said in a news release.

The seed funding has been awarded to the following principal investigators:

  • Kevin McHugh, associate professor of bioengineering and chemistry at Rice, and Peter Kan, professor and chair of neurosurgery at the UTMB. McHugh and Kan are developing an injectable material designed to seal off fragile, abnormal blood vessels that can cause life-threatening bleeding in the brain.
  • Jerzy Szablowski, assistant professor of bioengineering at Rice, and Jochen Meyer, assistant professor of neurology at Baylor. Szablowski and Meyer are leading a nonsurgical, ultrasound approach to deliver gene-based therapies to deep brain regions involved in seizures to control epilepsy without implanted electrodes or invasive procedures.
  • Juliane Sempionatto, assistant professor of electrical and computer engineering at Rice, and Aaron Gusdon, associate professor of neurosurgery at UTHealth Houston. Sempionatto and Gusdon are leading efforts to create a blood test that can identify patients at high risk for delayed brain injury following aneurysm-related hemorrhage, which could lead to earlier intervention and improved outcomes.
  • Christina Tringides, assistant professor of materials science and nanoengineering at Rice, and Sujit Prabhu, professor of neurosurgery at MD Anderson, who are working to reduce the risk of long-term speech and language impairment during brain tumor removal by combining advanced brain recordings, imaging and noninvasive stimulation.

The grants were facilitated by Rice’s Educational and Research Initiatives for Collaborative Health (ENRICH) Office. Rice says that the unique split-funding model of these grants could help structure future collaborations between the university and the TMC.

The Rice Brain Institute launched this fall and aims to use engineering, natural sciences and social sciences to research the brain and reduce the burden of neurodegenerative, neurodevelopmental and mental health disorders. Last month, the university's Shepherd School of Music also launched the Music, Mind and Body Lab, an interdisciplinary hub that brings artists and scientists together to study the "intersection of the arts, neuroscience and the medical humanities." Read more here.

Your data center is either closer than you think or much farther away

houston voices

A new study shows why some facilities cluster in cities for speed and access, while others move to rural regions in search of scale and lower costs. Based on research by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard).

Key findings:

  • Third-party colocation centers are physical facilities in close proximity to firms that use them, while cloud providers operate large data centers from a distance and sell access to virtualized computing resources as on‑demand services over the internet.
  • Hospitals and financial firms often require urban third-party centers for low latency and regulatory compliance, while batch processing and many AI workloads can operate more efficiently from lower-cost cloud hubs.
  • For policymakers trying to attract data centers, access to reliable power, water and high-capacity internet matter more than tax incentives.

Recent outages and the surge in AI-driven computing have made data center siting decisions more consequential than ever, especially as energy and water constraints tighten. Communities invest public dollars on the promise of jobs and growth, while firms weigh long-term commitments to land, power and connectivity.

Against that backdrop, a critical question comes into focus: Where do data centers get built — and what actually drives those decisions?

A new study by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard Business School) provides the first large-scale statistical analysis of data center location strategies across the United States. It offers policymakers and firms a clearer starting point for understanding how different types of data centers respond to economic and strategic incentives.

Forthcoming in the journal Strategy Science, the study examines two major types of infrastructure: third-party colocation centers that lease server space to multiple firms, and hyperscale cloud centers owned by providers like Amazon, Google and Microsoft.

Two Models, Two Location Strategies

The study draws on pre-pandemic data from 2018 and 2019, a period of relative geographic stability in supply and demand. This window gives researchers a clean baseline before remote work, AI demand and new infrastructure pressures began reshaping internet traffic patterns.

The findings show that data centers follow a bifurcated geography. Third-party centers cluster in dense urban markets, where buyers prioritize proximity to customers despite higher land and operating costs. Cloud providers, by contrast, concentrate massive sites in a small number of lower-density regions, where electricity, land and construction are cheaper and economies of scale are easier to achieve.

Third-party data centers, in other words, follow demand. They locate in urban markets where firms in finance, healthcare and IT value low latency, secure storage, and compliance with regulatory standards.

Using county-level data, the researchers modeled how population density, industry mix and operating costs predict where new centers enter. Every U.S. metro with more than 700,000 residents had at least one third-party provider, while many mid-sized cities had none.

ImageThis pattern challenges common assumptions. Third-party facilities are more distributed across urban America than prevailing narratives suggest.

Customer proximity matters because some sectors cannot absorb delay. In critical operations, even slight pauses can have real consequences. For hospital systems, lag can affect performance and risk exposure. And in high-frequency trading, milliseconds can determine whether value is captured or lost in a transaction.

“For industries where speed is everything, being too far from the physical infrastructure can meaningfully affect performance and risk,” Pan Fang says. “Proximity isn’t optional for sectors that can’t absorb delay.”

The Economics of Distance

For cloud providers, the picture looks very different. Their decisions follow a logic shaped primarily by cost and scale. Because cloud services can be delivered from afar, firms tend to build enormous sites in low-density regions where power is cheap and land is abundant.

These facilities can draw hundreds of megawatts of electricity and operate with far fewer employees than urban centers. “The cloud can serve almost anywhere,” Pan Fang says, “so location is a question of cost before geography.”

The study finds that cloud infrastructure clusters around network backbones and energy economics, not talent pools. Well-known hubs like Ashburn, Virginia — often called “Data Center Alley” — reflect this logic, having benefited from early network infrastructure that made them natural convergence points for digital traffic.

Local governments often try to lure data centers with tax incentives, betting they will create high-tech jobs. But the study suggests other factors matter more to cloud providers, including construction costs, network connectivity and access to reliable, affordable electricity.

When cloud centers need a local presence, distance can sometimes become a constraint. Providers often address this by working alongside third-party operators. “Third-party centers can complement cloud firms when they need a foothold closer to customers,” Pan Fang says.

That hybrid pattern — massive regional hubs complementing strategic colocation — may define the next phase of data center growth.

Looking ahead, shifts in remote work, climate resilience, energy prices and AI-driven computing may reshape where new facilities go. Some workloads may move closer to users, while others may consolidate into large rural hubs. Emerging data-sovereignty rules could also redirect investment beyond the United States.

“The cloud feels weightless,” Pan Fang says, “but it rests on real choices about land, power and proximity.”

---

This article originally appeared on Rice Business Wisdom. Written by Scott Pett.

Pan Fang and Greenstein (2025). “Where the Cloud Rests: The Economic Geography of Data Centers,” forthcoming in Strategy Science.