Texas halts new data centers as governor calls for audits; also, is the future of data centers portable?

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0:50So you can focus on other important things, like savoring that last bit of pumpkin pie. From early startups to Fortune 500 companies, thousands are turning to Framer to build a website they'll love. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com slash tcstartups for 30 % off a Framer Pro annual plan. That's framer.com slash tcstartups for 30 % off. Rules and restrictions may apply. Tech companies and developers have been scouring the U.S. for places to build data centers, and they've been drawn to Texas's loose regulations and seemingly abundant power supply.

1:33Only Virginia hosts more data centers than Texas. But even Texas can be pushed to the brink. Governor Greg Abbott announced on Monday that all new data center projects will need to be audited by both the Public Utility Commission of Texas and the state's grid operator, the Electric Reliability Council of Texas, or ERCOT. The size of ERCOT's interconnection queue has grown dramatically this year. In January, ERCOT had 233 gigawatts of projects waiting to connect to its grid. In less than six months, that figure had more than doubled. Today, Abbott's office said ERCOT is tracking 474 gigawatts of new connection requests.

2:17About 90 % of those are data centers, according to the grid operator. Some of those projects are simply paper proposals at this point. Because queues for grid connections have grown so long, the first action many developers take is to get in line. Many projects fizzle out as they progress. If even a fraction of those proposed projects come to fruition, they could overwhelm the Texas grid. The interconnection queue today represents more than five times ERCOT's total peak demand. While many data center operators, including Google and Microsoft, have been drawn to Texas for its ample natural gas reserves, wind and solar have helped ERCOT keep pace with growing electricity demand, according to the Energy Information Administration, or EIA.

3:08Utility-scale solar capacity grew fourfold between 2021 and 2025. Meanwhile, electricity prices declined over much of that time, according to a report from Amperon. Electricity prices in Texas are relatively affordable compared with other states, but they have been rising. Data centers and crypto mining facilities have pushed prices higher, according to the EIA. Now, Abbott clearly wants to head off that trend. The governor has directed P-U-C-T and ERCOT to collect a range of information about proposed data centers, including their on - and off-site demand for electricity and water, noise mitigation efforts, light controls, use of tax incentives, and ownership details.

3:54Historically, Texas has favored lighter regulation than many other states when it comes to development. Houston famously lacks a zoning code, and the state has a business-friendly regulatory environment. But data centers have become a flashpoint across the country, including in Texas. Abbott had previously tried to coax data centers into providing more information through a voluntary survey, most did not respond. And so, he's taking a heavier hand to compel compliance. Depending on what emerges from the audits, Texas's days as a data center mecca may be coming to a close. On Tuesday, AI infrastructure company Runware announced the launch of its own modular data center called Sonic Inference Pod.

4:47Designed as a single transportable unit, the pod represents a more flexible kind of compute that can sit alongside Hyperscaler's massive data center projects. Runware says the pod can offer inference at a higher quality but lower cost than other serverless inference platforms and GPU clouds. The modular design means it's easy to add capacity quickly by creating new pods rather than having to expand a fixed data center. Runware co-founder and CEO Flavio Radulescu said that in some ways this is the future. He went on to say that we believe distributed compute positioned closer to end users for faster inference is what will win in the long term.

5:37Aside from a lower price, Radolescu noted that the runware system can scale and add capacity fast, deploy anywhere there is power, and adapt quickly to new hardware releases. The runware pods also do not use water, but rather a closed-loop cooling system that can be built in days compared to the months or even years it takes to build traditional data centers. Vatilescu said that demand for inference is growing faster than facilities can be built. What we want is to power the world's intelligence, to be the backbone every AI model runs on with capacity that keeps up with demand instead of throttling it.

6:19Runware currently has 10 pods in deployment across the US, Europe, and Asia-Pacific. The company already provides inference to a few companies, including Higgs Field AI and Wix, and has 160 sites available to power its pods right now. Runware announced a$50 million Series A in December to provide the infrastructure needed for companies to generate images. They see the expansion into pods as part of the company's core mission, providing inference to companies rather than a single product. AI labs like OpenAI and SpaceX are still racing to build data centers throughout the U.S. OpenAI, for example, is close to striking a$500 billion deal that would see it build a data center in Ohio.

7:06But Radalescu does not see those projects as a threat to the sonic inference pods, describing the flexibility of the pods as a key differentiator. He said, every pod runs as part of a single network, so requests go wherever there's capacity, closer to the users, and if one pod goes offline, traffic moves to another. Customers who want dedicated hardware get whole pods to themselves. Radalescu is also not too worried about other companies building this for themselves, saying simply that hardware is slow and finding the talent pool to build and fix this technology is small. A mistake in a circuit board design costs months between redesign, simulation, fabrication, testing, and delivery, he says.

7:51Every one of those calls needs someone who understands exactly what each component does and what breaks if it's gone. Building AI data centers is a controversial topic, however, especially because of how many resources it uses. Already, communities where data centers are located have reported seeing a rise in utility costs. One day, Runware sees a world where it can run on renewable power and doesn't draw on the resources communities need. But that day is not necessarily today. Radolescu said that AI power use is going to increase regardless, driven by demand for inference, not by who supplies it.

8:32what RunWare is focused on right now is how that demand gets met. He said, no transmission losses, no water and cooling, and we're using power that already exists instead of asking for new grid capacity to be built. More inference built this way means less new grid, less water for the same amount of compute. That's all for now. For the latest in tech news, go to TechCrunch.com.

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