Texas Data Center Boom Pushes Construction Costs to Historic Highs

Texas is investing a record $26 billion in data center construction in 2026, a 63 percent surge driven by explosive AI demand—but the buildout is colliding with soaring costs that are straining developers' budgets. Shell-and-core construction for a single gigawatt AI data center now costs approximately $11.3 million per megawatt, up 6 percent from 2025, with costs ranging from $190 to $340 per square foot depending on location and specifications. The state hosts over 250 active data center projects, with 140 already under construction, supported by an unprecedented 6.5 gigawatts of new power capacity—the highest in North America—yet developers face critical bottlenecks in electrical interconnection, material delivery, and specialized labor.