Texas, with its low electricity prices and abundance of land, is drawing a wave of data center investment.

Why it matters: Texans and Americans are bracing for what trillions of dollars in AI infrastructure investment will mean for them.

• The state offers one of the most generous tax incentives in the nation, worth more than $1 billion annually.

The latest: Some state legislators are rethinking whether that tax break is appropriate. State Sen. Joan Huffman (R-Houston) told the Texas Tribune this month the amount in tax breaks is "unsustainable."

• "I plan to look at filing legislation to either repeal the exemption or take a very close look at it and see," Huffman said.

The other side: U.S. Rep. Beth Van Duyne (R-Irving) said at a recent Axios event in Dallas that the incentives keep projects and jobs in the U.S. instead of abroad, noting companies already pay significant taxes.

By the numbers: Texas has 212 operating data centers as of 2024 and 651 have been announced, according to data firm Aterio. Another 157 are under construction.

• Harris County is home to 24 active data centers, with three more under construction in north Harris County and another announced in Hockley, per Aterio data shared with Axios.
• There are three in Waller County, two in Montgomery County and one each in Galveston, Brazoria and Fort Bend counties.

Yes, but: While Texas may be optimal for industry, residents are concerned over water demands in a state experiencing drought and electricity demands that could lead to higher bills.

• Jobs and economic development — the main benefits politicians and companies point to — could be short-lived unless local governments secure longer-term gains for local communities.

Texas is far from being an outlier in embracing AI investments.

• Virginia remains the country's most established ecosystem of data centers with a long-running tax exemption.

The bottom line: No state is fully for or against AI data centers. Communities across the country are attempting to strike a balance between economic opportunity and people's rising concerns over water use, energy demand and costs.

Go deeper

Smart, essential local news doesn't happen by accident. It's powered by readers like you.

Why it matters: Your support helps keep our coverage focused on what matters most in your community, from big decisions to everyday changes shaping where you live.

💡 Become a member today. You'll back the journalism that keeps you informed and help ensure it stays strong.

• Your support helps us keep your community connected to what matters most.

While the Iran war is driving up food inflation, you don't have to skimp on avocados.

Why it matters: A staple food in these parts, avocados are great for helping manage cholesterol.

By the numbers: Our Axios Austin colleagues, who have been on the avocado beat for years, pointed out that small avocados were selling for 45 cents each at H-E-B in their region.

• In Houston, H-E-B's small avocado is 55 cents. At Kroger, a medium avocado is 89 cents, or you can buy a two-pound bag of "mini" avocados for $4.49.

Flashback: In June 2022, small avocados were about $1.08 apiece in the Austin area.

State of pits: The U.S. has been importing record numbers of avocados, per the trade group Avocados from Mexico.

• Bumper crops, driven by healthy rains, have led to the glut in supply, Bloomberg recently reported.

The bottom line: It may not be gas season, but it is guac season.

🏛️ Attorney General Ken Paxton is suing the city of Houston over its new policy limiting police officers' cooperation with ICE agents.

• City Council is expected to address the ordinance Wednesday. (Houston Chronicle)

🐘 Two Asian elephants will soon be transferred from the Houston Zoo to another unnamed accredited facility to help better the chances for their species' survival.

• Because the pair's genetics too closely resemble the herd in Houston, moving them will "create new opportunities" for preservation efforts, zoo officials say. (Chron)

Magnolia city leaders will meet today to discuss the arrest of Mayor Matthew Dantzer, who was charged with felony assault of a pregnant person and misdemeanor official oppression in Tarrant County last week.

• Dantzer is accused of assaulting the city secretary while on a work trip in Fort Worth last year. He denies the allegations. (Conroe Courier)

🎭 See the first run of "An Ideal Man," a Houston-based adaptation of Oscar Wilde's "An Ideal Husband," at Spring Street Studios.

• Tickets are $20. 8pm tonight.

🤠 Learn about how Texans played a role in the American Revolution at The Heritage Society's speaker series downtown.

• Tickets are $10. 5:30pm tomorrow.

🏀 Attend the official Rockets watch party at Little Woodrow's Midtown as Houston takes on the Los Angeles Lakers in Game 2 of the NBA playoffs' first round.

• Free. 9pm tomorrow.

🙀 Sign up your cat to be neutered at the Houston Humane Society's Fix Felix neutering marathon on the south side.

• Registration is $5 per cat. Appointments vary Wednesday.

🔥 Take your date to Segreto Lounge's Caliente Latin Night with live music, DJ sets and good vibes.

• 8pm Thursday.