“Regulatory barriers could cause lost opportunities for economic growth, and raise national security concerns for our nation.”
By Eduardo Contreras
AUSTIN, Texas (Texas Insider Report) — Texas has always played a central role in bolstering the security of our nation. Whether it’s Dyess Air Force Base in the Big Country, Joint Base San Antonio (JBSA), or the Army Futures Command (AFC) in Austin, our state remains at the cutting edge of defending the U.S. and its interests at home and across the world.
With an ever-evolving threat environment that includes cyberattacks from malicious foreign actors seeking to cripple our critical infrastructure and gain access to our financial institutions, Texas now has an opportunity to serve on the front lines of the next major battlefield upon which the future of our nation and the global economy will be determined: data.
It’s not an understatement to suggest that the control – or lack thereof – of the data underlying nearly every aspect of our modern digital lives will determine whether the U.S. stays ahead or falls behind an increasingly aggressive China in the next decade.Currently, the U.S. accounts for just over 50% of global data center capacity, while China accounts for about 16%. Before you breathe a sigh of relief, it’s important to remember that China is making a concerted, strategic effort to overtake the U.S. on the data battlefield, having invested more than $6 billion to build new data centers in recent years and attracting nearly $30 billion in private investment to further bolster its data capacity across eight major hubs.
The recent DeepSeek announcement should serve as a warning of how the U.S. could fall behind if it does not continue to invest in digital infrastructure.
To ensure we stay ahead, Texas needs to be at the forefront of data center growth to keep Americans’ data stored securely in America.
The facilities powering the artificial intelligence (AI) revolution across nearly every sector of our economy – an industry projected to create more than $4 trillion in economic value in the next five years – must also remain on U.S. soil.
The facilities powering the artificial intelligence (AI) revolution across nearly every sector of our economy – an industry projected to create more than $4 trillion in economic value in the next five years – must also remain on U.S. soil.
Already, Texas is home to the second-largest data center market in the nation – and we should not cede that position by introducing a new, onerous regulatory regime that would drive new investment to other states and even other nations.
Late last year, Chairman of the Federal Energy Regulatory Commission (FERC) Willie Phillips issued a blunt warning to U.S. regulators on the development of new data centers, telling attendees that “regulatory barriers could cause lost opportunities for economic growth and raise national security concerns for our nation.” Chairman Phillips also made clear that AI and similar technology supported by data centers hold “generational significance” for the United States.
Nowhere should this warning resonate more clearly than in Texas, where our regulatory landscape can make or break our future when it comes to attracting investment from data centers, which goes hand-in-hand with encouraging the new generation that is needed to power the incredible growth we’re seeing today.
Lawmakers should bear in mind that introducing regulatory barriers that discourage new data center investment and power generation would put Texas at an unfortunate and strategic disadvantage compared to other states, relegating us to the sidelines at a time when we need to be leading.
Lawmakers should bear in mind that introducing regulatory barriers that discourage new data center investment and power generation would put Texas at an unfortunate and strategic disadvantage compared to other states, relegating us to the sidelines at a time when we need to be leading.
Already, our state’s regulatory environment and concerted investments in advanced semiconductor production have helped bring supply chains closer to home, reducing our dependence on foreign technology products.Likewise, Texas leaders need to recognize that more data centers – the heart of which are servers with processing units powered by semiconductors – encourage even more technology components to be manufactured on U.S. soil, enhancing both our national security and our economic independence.
As President Trump has said, winning the AI arms race against China and other adversaries is key to U.S. national security. His commitment to promoting the rapid development of additional data center and energy capacity to support the nation’s leadership in AI will ensure we don’t allow China to beat us in the coming battle over data.
Texas has a critical role to play in hosting many of these data centers within state borders. In fact, Abilene was recently announced as the first location for the Stargate Project – a $500 billion joint venture that President Trump has called “the largest AI infrastructure project by far, in history.”
Texas has a critical role to play in hosting many of these data centers within state borders. In fact, Abilene was recently announced as the first location for the Stargate Project – a $500 billion joint venture that President Trump has called “the largest AI infrastructure project by far, in history.”
To preserve and advance Texas’ leadership in economic growth, innovation – and protection of our nation – we must remain at the forefront in encouraging new data center construction to win the global AI race against China.
If the U.S. expects to maintain and strengthen its global superiority, it cannot afford for the 8th largest economy in the world to be on the sidelines.
Eduardo Contreras is the CEO of Austin-based AlconDTS, a managed IT and cybersecurity firm that helps small and medium-sized businesses enhance their technology operations. Contreras is also a Board Member of the Greater Austin Hispanic Chamber of Commerce and the National Federation of Independent Business (NFIB) Leadership Council. 
