Data centers contributed over 485K jobs in Texas in 2023, industry report says

Posted by author February 19, 2025 Jobs

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The data center industry supported more than 485,000 jobs and contributed $35 billion in labor income to Texas in 2023, a new study from the Data Center Coalition reported Wednesday morning.

The Data Center Coalition, a membership association for the data center industry, released its study on the economic contributions of data centers in the U.S. between 2017-23 on Wednesday morning. The study reported that data centers contributed almost 4.7 million annual jobs, $404 billion in annual labor income and $727 billion in gross domestic product value in 2023.

The study, which is an updated version of the Data Center Coalition’s report detailing economic contribution between 2017-21, pulled information from the Census Bureau, the Bureau of Labor Statistics and the Bureau of Economic Analysis.

“It’s important to understand the broader economic value that data centers bring,” Dan Diorio, senior director of state policy for the Data Center Coalition, told the American-Statesman. “These are not just large buildings with server equipment inside them. They’re economic drivers. And in particular, they’re economic drivers for the state of Texas.”

How Texas compared to the rest of the country

Diorio explained that jobs that are “supported” by data centers are not the same as people who directly work in a data center everyday. Data centers, he said, support other jobs like construction, steel fabrication, contractors, professional service providers, transportation and more.

With the reported 485,100 jobs in Texas in 2023, 725,000 jobs were supported by data centers in California and 147,000 in Virginia, a leader in the data center industry. It is worth noting that these numbers include “cross-state spillover effects” and include indirect or influenced jobs. The number for direct employment contributions in Texas was 61,000 in 2023.

Texas’ 2023 statistics from the report:

485,100 jobs.
$35 billion in labor income.
$39 billion GDP.

“For every one job in a data center, six and a half jobs are supported elsewhere in the economy,” Diorio said. “And I think that’s illustrated really well in Texas. That is a clear indication of the far reaching business ecosystem that data centers help provide. It comes from steel fabrication, comes from strong construction jobs. It comes from HVAC contractors, but it also does come from those professional services: food services, health care, accommodations, real estate rentals, leasing, transportation and warehousing. A very wide range of industries that are all growing along with the data center industry in Texas.”

The number of jobs at a data center and the amount of energy required has often been a source of contention for those who do not support the rapid rise in the data center industry.

Stargate, a $500 billion joint-venture between OpenAI, Oracle and Softbank, is kicking off its large-scale artificial intelligence infrastructure plans with an 875-acre data center campus Abilene.

The expansive data center campus is expected to directly create about 57 full-time jobs, with an average annual wage of $57,600. The final tally could be higher.

Data centers also require expansive amounts of power, transmission and generation.

Data centers in Texas accounted for 4.5% of the total state electricity consumed in 2023, according to the nonprofit electricity researcher The Electric Power Research Institute, or EPRI. EPRI projects that data centers could consume up to 9% of U.S. electricity generation annually by 2030, with that number being up to 10.64% in Texas.

Pablo Vegas, CEO of the Electric Reliability Council of Texas, told lawmakers in June that grid capacity needs to grow from 85,000 to 150,000 megawatts in the next six years as bitcoin mining and data centers will account for more than half of the added growth on the Texas grid.

About 37% of the U.S.’s total data center load in 2023 was in Virginia and Texas, according to Aurora Energy Research.

The Stargate data centers, including the one in Abilene, will be designed to be in roughly 1 gigawatt or greater range. One gigawatt can power about 750,000 homes. Report from commercial services firm CBRE said under-construction data centers are expected to reach a record high in 2025, with the scale of these developments to average in over 100 megawatt projects.

Many data center critics say that data centers not only put large loads on the grid, but they also drive energy costs for every day residents.

In Northern Virginia, for example, a December study suggested that unconstrained data center growth is likely to increase power costs in the state by as much as $18 billion by 2040, with residential and other ratepaying customers sharing that cost due to the current ratepaying system.

Diorio said data centers want to pay the full cost for their service, and they don’t want residents to feel the affects of those energy changes.

“We are part of the large loads coming online, and we’re working to provide input on any type of measures or questions that are out there to really allow for a reliable, resilient and affordable grid for all of Texas, and one especially that balances with keeping the economy strong and Texas for a hub of innovation. …,” Diorio said. “We want to be an engaged stakeholder with grid reliability questions in Texas, we want the grid to be reliable, resilient and affordable.

“Data centers are fully committed to paying their full cost of service for energy. The industry does not want residential ratepayers subsidizing data center energy use.”

Data center expansion in Texas

Following only Northern Virginia, the Dallas-Fort Worth area is a leader in the data center industry, with Austin and San Antonio leading secondary data center markets.

CBRE has reported that Austin and San Antonio’s combined under-construction data center activity more than quadrupled in the first half of 2024 compared with the previous year. Central Texas has the most data center space under construction of all secondary markets and the fourth-most among all markets, according to CBRE. If all in-progress construction were to be completed now, the combined Austin and San Antonio data center market would be the second-largest data center market in the country.

Texas is continuing to be on the national stage for AI infrastructure and data center projects, with the Stargate joint venture looking at more sites and as more and more technology companies move headquarters or open offices in the Lone Star State.

“Austin is a strong secondary market in the country. It’s probably one of the fastest growing secondary markets in the country,” Diorio said. “So what you end up with is Texas having very strong markets, both at the top end and these growing markets as well. And that’s an indication of the industry broadening out.”