Texas data centers consume 25 billion gallons of water annually while most of the state faces drought, and a $115 billion Stargate campus will intensify water competition in the Texas Panhandle

Existing Texas data centers consume approximately 25 billion gallons of water per year for evaporative cooling, according to a January 2026 Houston Advanced Research Center report, while most of the state faces drought or near-drought conditions, and the OpenAI-led Project Stargate plans an estimated $115 billion in data center construction spanning 50+ buildings across multiple Texas campuses, including the water-stressed Panhandle region where Fermi America's construction has already paused due to permitting issues. Why it matters: Evaporative cooling towers are the cheapest and most energy-efficient cooling method, so data center operators in Texas default to water-intensive cooling to minimize electricity costs and PUE ratings, so agricultural irrigation, municipal water supplies, and data centers are drawing from the same declining Ogallala Aquifer and surface water sources, so Texas farmers and ranchers face higher water costs and potential allocation cuts as industrial demand grows, so food production costs in one of America's top agricultural states increase, passing costs to consumers nationwide. The structural root cause is that Texas water rights follow a 'rule of capture' for groundwater that allows unlimited pumping from beneath your own land with no regard for aquifer depletion, and the state's deregulated energy market (ERCOT) prices electricity but does not price water consumption into facility operating decisions, creating a perverse incentive to trade cheap water for expensive electricity savings through evaporative cooling.