Thank you for the opportunity to provide testimony on behalf of the Texas Association of Business (TAB), the state chamber of commerce. TAB represents businesses of every size, industry, and region across Texas, along with more than 200 local chambers of commerce.
We appreciate the Committee's thoughtful review of data center investment in Texas and the broader question of how the state can ensure Texans benefit from continued growth in digital infrastructure.
As the Committee evaluates this issue, we encourage consideration of the full economic value associated with data center investment, including its role in supporting Texas' long-term competitiveness, expanding local commercial tax bases, strengthening critical infrastructure, and enabling growth across virtually every sector of the economy.
Data centers are no longer simply technology facilities. They are foundational infrastructure for the modern economy. Just as previous generations invested in highways, ports, rail, airports, and electric transmission, today's economy increasingly depends on secure and reliable digital infrastructure.
Texas has been home to commercial data center investment for more than two decades. Long before artificial intelligence became a household term, data centers quietly powered the everyday digital services Texans depend upon, including online banking, healthcare records, telecommunications, cloud computing, internet commerce, and enterprise business operations. Financial institutions, healthcare providers, manufacturers, retailers, logistics companies, energy producers, universities, government agencies, and small businesses all rely on secure and reliable digital infrastructure every day.
Today, that same infrastructure is expanding to support artificial intelligence and other emerging technologies that are expected to drive the next generation of innovation across nearly every sector of the economy.
For Texas, attracting data center investment is therefore about far more than the growth of a single industry. It is about creating the foundation necessary for continued innovation, productivity, and economic expansion throughout the state.
Texas is a national leader in attracting digital infrastructure because of advantages that extend well beyond any single economic development program. Our strong business climate, skilled workforce, available land, robust energy resources, and longstanding commitment to innovation have positioned Texas as one of the nation's premier destinations for technology investment.
Those advantages have helped attract tens of billions of dollars in private capital investment in commercial data centers, supporting significant construction activity, expanding state and local tax bases, and positioning communities across Texas to participate in the next generation of economic growth.
Texas is also strengthening its position as a national leader in semiconductor manufacturing. As chip production and digital infrastructure continue to grow together, Texas is uniquely positioned to capture more of the technology value chain, from designing and manufacturing advanced semiconductors to deploying the data centers that put those technologies to work.
The economic benefits associated with digital infrastructure investments extend well beyond the construction of individual facilities.
Large-scale data center development supports engineers, electricians, contractors, equipment manufacturers, suppliers, professional service providers, and small businesses throughout the supply chain. Projects also involve substantial private investment in electric, fiber, utility, and other infrastructure that strengthens the long-term competitiveness of surrounding communities.
These facilities also generate substantial public revenues through multiple channels, including property taxes, franchise taxes, operational purchases, and applicable sales and use taxes. A recent PwC analysis estimated that Texas data centers generated approximately $2.2 billion in state tax revenue and $2.3 billion in local tax revenue during 2024, demonstrating that these investments provide significant ongoing fiscal benefits to both the state and local communities.
As Texas continues to pursue leadership in artificial intelligence, advanced manufacturing, life sciences, aerospace, financial services, and other high-growth industries, digital infrastructure will become an increasingly important component of the state's overall economic development strategy.
The Committee has specifically asked how Texas can ensure that Texans benefit from continued data center investment.
From the perspective of the broader business community, those benefits should be evaluated comprehensively. They include direct tax revenue, private capital investment, construction and operational activity, opportunities for Texas businesses, infrastructure development, workforce growth, and the broader economic value created by maintaining the digital capacity required to support other major industries.
Economic development decisions must also account for the increasingly competitive environment in which these investments are made. Data center projects involve significant capital commitments, long planning horizons, and competition among states and countries. Businesses evaluating where to invest place a premium on predictability, policy stability, and a clear understanding of long-term expectations. Maintaining those advantages has been an important part of Texas' economic success for decades.
As the Legislature considers potential recommendations, TAB encourages an approach that:
• evaluates both fiscal impacts and the broader economic benefits associated with investment;
• promotes transparency and accountability regarding outcomes;
• provides long-term certainty for businesses making significant capital investments;
• recognizes the value of investment to local communities, schools, and regional economies;
• supports the continued growth of industries that depend on digital infrastructure; and
• maintains Texas' position as the nation's leading destination for investment and innovation.
Texas has built the strongest economy in the nation by welcoming innovation, encouraging investment, and creating an environment in which businesses can grow.
Demand for digital infrastructure will continue to grow regardless of where it is built. The question before Texas is whether our state will continue to lead that growth and capture the investment, innovation, jobs, and long-term economic opportunities that accompany it.
We appreciate the Committee's consideration and its continued leadership on issues important to the future of the Texas economy.
Editor’s Note: The above testimony was submitted to the Texas Senate Finance Committee by Gabriela von zur Muehlen, SVP & Chief Policy Officer for the Texas Association of Business, on July 27, 2026. The committee has been set an interim charge to investigate data center investment and their effect on the state’s economy.
