Texas Put AI Data Centers on Notice. Meta and Digital Realty Already Chose Their Side

Texas is shifting its regulatory approach toward AI data center expansion after Governor Greg Abbott ordered an audit of projects within ERCOT's interconnection queue on August 3. The queue holds over 474 gigawatts of interconnection requests, which exceeds the state's record peak demand by more than fivefold. In response, both Meta Platforms and data center REIT Digital Realty Trust have committed to aligning with the state's stricter infrastructure and utility standards. Meta stated it will cover the full costs of energy and water infrastructure rather than passing them on to consumers, using its substantial balance sheet to secure capacity. Meanwhile, Digital Realty stands to benefit as tighter grid access turns existing, powered facilities into scarcer and more valuable assets. However, analysts note that additional verification processes and transmission requirements may delay capacity additions and inflate per-megawatt development costs across the industry, creating a double-edged sword for AI infrastructure rollouts.