Data Centers Drain Rural Texas as AI Boom Threatens Agriculture

Layton Tucker's family has worked cattle in Lampasas County for four generations. In Texas, the math of ranching is simple and brutal: less rain means less hay, which means cattle prices collapse. During the drought years of 2021 through 2024, Tucker watched neighbors drive five hours to find feed. Many sold off half their herds. There simply wasn't enough water, enough grass, enough of anything to sustain what their parents had built.

Tucker is thirty-five now, and increasingly rare. Growing up in rural Central Texas, he watched as small farmers were pushed out by corporate meat processors and equipment manufacturers who controlled prices. John Deere and the big meat companies made it impossible for a family operation to afford the basics. Now, as Texas faces climbing temperatures and deepening drought, a generation whose parents farmed is leaving the land. Between 2017 and 2022, Texas lost nearly eighteen thousand farms. In 2025 alone, the state lost two thousand more—the highest number of any state that year. The average farm has swollen from thirty acres to four or five hundred, a sign, Tucker says, that the system has failed small farmers entirely.

But there is a new threat arriving faster than drought. Over one hundred data centers are coming to Texas in the next few years, massive campuses that can span hundreds or thousands of acres. These are the server farms that store Google searches, Meta accounts, Amazon purchases—the digital infrastructure of artificial intelligence. The servers generate enormous heat and need constant cooling. Most rely on local water supplies to do it. In 2025, data centers in Texas used twenty-five billion gallons of water. By 2030, that number is projected to reach one hundred sixty-one billion gallons. On the power side, the Electric Reliability Council of Texas projects peak grid demand could climb to three hundred sixty-seven thousand megawatts by 2032, largely because of data centers. ERCOT's current record is roughly eighty-five thousand megawatts.

Central Texas has become a data center hot spot. Over thirty facilities are in development across six counties—Bexar, Comal, Hays, Travis, Caldwell, and Williamson. The developers are drawn by open land, generous water and power access, and significant state tax breaks. In 2013, the Texas Legislature granted data center operators sales tax exemptions on electricity, cooling systems, and hardware. In 2026 alone, the state will hand out one point three billion dollars in exemptions. Over the next two years, Texas will lose three point two billion dollars in revenue. Governor Greg Abbott has welcomed the largest data centers in the country, calling Texas the epicenter of AI development after Google announced a forty-billion-dollar investment in new facilities here last November. Other states—Florida, Wisconsin, California—have begun hitting the brakes on data center construction, worried about the drain on local resources. Texas has not.

In Uhland, a quiet town thirty miles southeast of Austin, Fernando and Wendy Tristan have owned a seven-acre farm for nearly three decades. On April 6, PowerHouse Data Centers held an open house to propose a five-hundred-acre campus directly next door. Wendy asked the PowerHouse representative if he would live next to such a facility. He could not answer. The next day, the city council was set to vote on rezoning the land for industrial use. But that afternoon, a council member announced on social media that PowerHouse had withdrawn the proposal. The relief was short-lived. PowerHouse can still apply to remove the land from the city's jurisdiction and place it under Caldwell County, where there is no zoning. By late April, the county confirmed PowerHouse had inquired about the process.

Caldwell County is becoming a data center hub. Tract, a Colorado company, is already building a three-thousand-acre mega campus south of Uhland—enough to power about eight hundred thousand homes. Edged Energy was approved in April to build a three-hundred-thirty-acre facility in Maxwell. Prime Data Centers plans a two-hundred-five-acre center in Lockhart. On April 11, over fifty neighbors gathered at a public library in Lockhart, many feeling betrayed by local officials who had approved these projects without full understanding of their impact. One resident asked why commissioners would sacrifice water, air, and electricity for supposed economic need. Another worried that utility bills would spike. Si Frede, an advocate with the Data Center Action Coalition, pointed out that data centers are often opaque about future usage and that apart from initial construction jobs, skilled tech positions are typically filled by workers brought in from elsewhere. Most permanent local jobs are custodial, groundskeeping, or security.

The environmental costs are substantial and still being measured. An October 2025 study found that data centers emit fine particulate matter from diesel generators that can enter the lungs, potentially contributing to approximately six hundred thousand asthma cases in the United States by 2028. Their generators, fans, and turbines hum at over ninety decibels twenty-four hours a day. Exposure to over sixty-five decibels damages health. A preliminary March study from the University of Cambridge found that surface temperatures near existing data centers increased by an average of three point six degrees Fahrenheit, and in some cases as high as sixteen point four degrees, raising temperatures up to six miles away. Summer heat is already a major cause of death for Texas cattle. Tucker emphasized that data centers affect soil and water quality for farming. Wells have run dry near construction sites. Others have become toxic with nitrates and heavy metals. The water and soil health diminish. Food nutrition itself diminishes.

Most new data centers use closed-loop water systems, where water cycles over server racks and through a cooling process, ideally reusing much of the same water. Prime Data Centers told the Chronicle that after initially filling their system, daily water consumption will be roughly nine hundred gallons per building—comparable to the annual consumption of nine average American homes across four data centers. But the technology varies significantly. Dry coolers and air-cooled chillers use little to no water. External cooling towers or water-cooled chillers use much more. Margaret Cook, a water expert at the Houston Advanced Research Center, noted that water is still more attractive to operators than air cooling because it is cheaper. In a hot state like Texas, water is simply more efficient. On a hot summer day, jumping into a swimming pool cools you faster than standing in front of a fan. The state's 2022 Water Plan projects a widening gap between what Texas needs and what it has—and that calculation does not even account for existing or future data centers. The 2026 and 2027 regional water plans will not include data center projections either, Cook said, because they are based on historic water use.

Without state-level intervention, local groundwater conservation districts lack the tools to prevent data centers from obtaining pumping permits. On April 9, the Texas Committee on State Affairs met to consider the AI boom's impact on water and grid reliability. Pablo Vegas, ERCOT's president, told legislators that the agency receives dozens of requests every month from new projects to connect to the grid, with about eighty-seven percent coming from data centers. He proposed a system where data centers could buy a spot in line to connect within a few years. Dan Diorio of the Data Center Coalition argued that the United States must remain a global leader in AI and that data centers support the Texas economy. In July, the Texas Senate Committee on Finance will reconsider the state tax breaks. But at the local level, when operators come to city councils and commissioners courts, residents can demand transparency: What is the plan for water use during drought? What is peak demand? Will they reuse water or harvest rainwater? Can they use alternative supplies?

Wendy Tristan does not oppose development. She opposes the burden falling on rural Texas. The tech developers live in Austin, she said. They will not hear the constant humming twenty-four hours a day. They will not live with the noise, the air pollution, the depleted aquifers. When her grandson was seven, he asked if he could inherit the family farm one day. She said yes. Her eyes filled with tears as she spoke to neighbors at the Lockhart meeting. But he will not want this land now.