Vantage Data Centers is making headlines with a record-breaking $25 billion investment in a data center in Texas. The new project, called Frontier Campus, will bring 1.4 gigawatts of hyperscale power. This will make the state a global center for AI and cloud infrastructure.
The project highlights Texas’ strengths in renewable energy and business-friendly policies. However, it also raises urgent questions about water use and sustainability in a drought-prone region.
Texas’ $25B Bet: The Frontier of AI Power
Vantage Data Centers’ $25 billion hyperscale data center campus is in Shackelford County, Texas. The Frontier Campus project will be one of the largest of its kind in the United States, with a total planned capacity of 1.4 gigawatts (GW).
For comparison, that’s enough power to support millions of servers and data workloads. This underlines the surging demand for cloud computing and artificial intelligence (AI).
Texas is an appealing spot for hyperscale data centers. This is thanks to its cheap electricity, plentiful renewable energy, and friendly business policies. The state tops the nation in wind power. It has quickly increased solar installations, allowing operators to use a cleaner energy mix than other U.S. states.
Dana Adams, president of North America at Vantage Data Centers, remarked:
“Texas has become a critical and strategic market for AI providers. In particular, the launch of our Frontier campus with 1.4GW of GPU compute capacity marks a watershed moment for Vantage as we deliver on our promise to meet the unprecedented requirements of our customers.”
Vantage focuses on sustainability in its designs. It features efficient cooling systems and aims to reduce environmental impacts. The company hasn’t said if it will sign direct renewable energy contracts or power purchase agreements (PPAs). ESG-focused investors and customers often expect this step.
This massive investment underscores the role of Texas as a digital infrastructure powerhouse. But it also reignites debates about water use and resource competition in a state struggling with recurring droughts.
Energy Strength: Why Texas Attracts Data Centers
The Frontier Campus reflects a broader trend of major tech and infrastructure companies flocking to Texas. Several factors make the state appealing:
- Renewable energy scale: Texas produces more wind energy than any other state, and its solar capacity is growing fast. According to the U.S. Energy Information Administration, renewables accounted for over 28% of Texas’ electricity generation in 2024.
- Competitive electricity prices: Abundant natural gas and renewables keep wholesale power prices relatively low compared to other regions.
- Supportive policies: Texas offers tax incentives and streamlined permitting for large infrastructure projects.
These factors make Texas a top choice for companies growing hyperscale data centers. It’s cost-effective and sustainable. Vantage’s Frontier Campus aims to use these benefits. It will also boost local jobs and tax revenue during both construction and operations.
Electricity availability seems good, but water scarcity is becoming a major challenge for the industry.
Water Use: A Growing Flashpoint
Data centers consume large amounts of water, mainly for cooling. Operators are trying to use water more efficiently. However, new projects are putting pressure on local supplies that are already stressed.
In Texas, residents in some drought-hit communities face restrictions on showering and lawn watering. At the same time, data centers collectively used 463 million gallons of water in 2023 and 2024 alone.
The Texas Water Development Board forecasts that data centers will use 49 billion gallons in 2025. This amount is expected to rise to about 400 billion gallons each year by 2030. By that point, data centers could account for about 7% of Texas’ total projected water use.
This raises worries about competition. Digital infrastructure and local communities are both vying for limited water resources.
Although data centers consume water amounts comparable to entire cities, most operators keep their usage data confidential. A University of Wisconsin-Milwaukee study revealed that in 2023, Google’s data centers alone used over 6 billion gallons of water for cooling.
In 2024, Google’s facility in Council Bluffs, Iowa, used 1 billion gallons of water. This amount could supply all of Iowa’s residential water needs for five days.
Meta disclosed that its data centers accounted for 95% of the company’s global water use in 2023, totaling 776 million gallons. Meanwhile, Microsoft’s water consumption surged 34% within a year, reaching 1.69 billion gallons across all its operations.
WestWater Research projects that water usage by data centers in the United States will grow by 170% by 2030.
Environmental groups warn that without better oversight, projects like Vantage’s might strain supplies. This could affect households, agriculture, and industry.
Walking the Tightrope: Growth vs. Sustainability
Vantage promises to use efficient cooling systems to cut water use. However, it hasn’t shared specific numbers for expected usage at the Frontier Campus. Alternatives like air cooling, recycled wastewater, and hybrid systems can ease strain. However, they usually have trade-offs in cost and efficiency.
The debate raises a key question:
- How to grow data infrastructure for AI, cloud services, and digital economies while minimizing environmental impacts?
For Texas, the stakes are high. The state aims to attract investment and stay competitive in clean energy. However, it must also protect resources for its residents.
The Global Data Center Arms Race
The Vantage project is part of a global surge in data center investment. AI workloads, cloud adoption, and streaming are fueling demand for ever-larger campuses. Analysts expect global data center capacity to double by 2030, with the U.S. and Asia leading growth.
The Frontier Campus is designed to meet the fast-growing demand for computing power fueled by AI. McKinsey estimates that by 2030, AI will drive the need for $5.2 trillion in global data center investments. Between 2025 and 2030, companies will have to add about 125 gigawatts of new capacity just to support AI workloads.
Texas has emerged as a focal point due to its renewable energy mix and available land. Microsoft, Google, and Amazon already have large footprints in the state, with further expansions planned.
The International Energy Agency (IEA) estimates that data centers used about 300 to 380 terawatt-hours (TWh) in 2023. The central estimate is around 360 TWh. This is down from 460 TWh in 2022. However, some other sources estimate 2023 consumption closer to 415 TWh.
The IEA and other reports predict that data center electricity demand will more than double by 2030. It could reach about 1,050 TWh, surpassing Japan’s current total electricity use. This surge is primarily driven by rapid growth in artificial intelligence (AI) and increased digital services. By 2035, demand could climb further to about 1,300 TWh.
Looking Ahead: What Stakeholders Want to See
For investors, customers, and regulators, transparency will be key. Stakeholders are likely to push for:
- Detailed reporting of water and energy use by Vantage and other operators.
- Commitments to renewable energy contracts to match rising power demand.
- Adoption of water-saving technologies, such as dry cooling or reclaimed water use.
Without these steps, projects risk backlash at a time when public scrutiny of big tech and environmental impacts is growing.
Vantage’s $25 billion Frontier Campus in Texas represents a bold bet on the state’s role in the global digital economy. The project builds on Texas’ strengths in renewable energy and low-cost power. Yet, it also highlights serious concerns about water scarcity.
