Austin Data Center Market Size, Share and Growth Analysis Report - Forecast Trends and Outlook 2026-2030

Austin has emerged as one of the leading secondary data center markets in North America, supported by a deep technology customer base, favorable tax treatment, and access to the ERCOT power grid. The market was valued at USD 2.361 billion in 2025 and is projected to reach USD 5.013 billion by 2035, expanding at a CAGR of 7.82%. Underlying capacity is also scaling quickly, with Austin-area data center power demand estimated at roughly 1.54 gigawatts in 2025 and projected to grow toward 2.19 gigawatts by 2031.

• •Market size of USD 2.361 billion in 2025, forecast at USD 5.013 billion by 2035 (7.82% CAGR).
• •Austin ranked among the top fast-growing secondary U.S. data center markets in recent industry outlooks.
• •Texas data centers as a whole already account for roughly 8 GW of power demand in 2025.

The primary growth engine is enterprise and hyperscale demand for AI-ready compute, which is pushing vacancy across primary U.S. markets to historic lows and forcing operators to expand into secondary hubs like Austin. Generative AI workloads, cloud migration, and the relocation of technology headquarters to Central Texas are accelerating leasing and new construction. At the same time, Austin benefits from comparatively lower land and power costs than Tier-1 markets such as Northern Virginia and Phoenix.

• •AI-driven compute demand pushed primary-market vacancy to a record low of about 1.4% in 2025.
• •Cloud and hyperscale providers are diversifying away from saturated Tier-1 markets.
• •Austin offers lower power costs, tax incentives, and a large in-region technology tenant base.

Demand in Austin splits between hyperscale wholesale tenants building multi-megawatt campuses and retail/colocation users serving regional enterprises, with AI and cloud computing representing the fastest-growing workload categories. Geographically, the Austin market is part of the broader Texas data center corridor that includes Dallas-Fort Worth and San Antonio, and is benefiting from cross-state fiber and power interconnections. Texas as a whole is forecast to become the single largest U.S. data center state by 2028.

• •Hyperscale wholesale capacity is expanding faster than retail colocation in Austin.
• •AI and cloud workloads account for the majority of new capacity commitments nationwide.
• •Texas-wide data center grid demand is projected to exceed 40 GW by 2028.

What are the recent trends and outlook?

Through 2035, Austin is expected to continue compounding above the global data center industry average as AI capacity, cloud growth, and enterprise digital transformation outpace supply. Industry outlooks place global data center revenue on track from roughly USD 270 billion in 2025 to USD 700 billion or more by the mid-2030s, with North America capturing the largest share and secondary markets like Austin absorbing overflow demand. Constraints around power availability, water usage, and grid permitting will shape which projects advance fastest.

• •Global data center market projected to grow at 11% or higher annually through 2034-2035.
• •Austin capacity measured in gigawatts expected to nearly double between 2025 and 2031.
• •Power, water, and permitting constraints will be the key gating factors for new Austin developments.