Future of AI in Texas: What We're Watching

Texas 2036 is honored to be in our fifth year as the official data partner of the?Texas Lyceum, which is holding its public conference in Austin this week on the?future of artificial intelligence in Texas.

With AI pushing?innovation seemingly on a daily basis, it's fair to say that this technology?has the potential to transform many aspects of everyday life for Texans, from health care and education to energy and transportation.

?? Check out our one-pager on AI's future in Texas!

What to know: AI and the Economy

Businesses in energy, health care, manufacturing?and beyond are using AI to streamline operations, enhance customer experiences?and stay competitive in a rapidly evolving marketplace:

• $20-plus?billion invested in generative AI in 2023 (Source: Our World In Data)
• 83% of business leaders surveyed in 2024 reported increased profitability and innovation due to AI (Source: McKinsey)
• 27% growth is projected in AI jobs?in Texas over the next decade, with the state ranking 4th nationally for AI-related job postings.
• Top AI jobs include:?Prompt Engineer, AI Researcher?and Machine Learning Engineer. (Sources: Texas Tribune; ABC 13 Houston)

Did you know? Jobs in record-keeping, cashiers, accounting, factory work and traditional security roles are among the most at risk from AI. (Source: Chamber of Commerce)?

Texas: At the Heart of AI Innovations

Source:?S&P Global Market Intelligence; 451 Research; S&P Global Commodity Insights

Texas is rapidly emerging as a global leader in AI, fueled by a thriving tech ecosystem, a booming data center industry and groundbreaking initiatives like the Stargate project.

• Data Centers: Texas is home to 279 data centers as of September, with the Dallas-Fort Worth area alone housing 141 centers — second only to Northern Virginia. Austin/San Antonio and Houston have also attracted?significant investments, driven by the state’s affordable energy and central location. (Sources: Texas Comptroller; JLL Report)

Open AI CEO Sam Altman posted drone footage on Jan. 23 on X teasing the Stargate Site 1 in Abilene.

• Stargate’s Launchpad: Abilene is the centerpiece of Stargate, a $500 billion national initiative announced by President Trump in partnership with OpenAI, SoftBank?and Oracle.

“That secret’s getting out. That Abilene is one of the best places in the world to live, work or raise a family. But now the secrets are outright with just the economic miracle that’s taking place here,” Taylor County Judge Phil Crowley told KTAB-TV.

Did you know? The Stargate project in Texas includes 10 “colossal data centers” on an 895-acre campus, comparable to New York’s Central Park, with plans to expand to 20 buildings.?(Sources: AP, PBS, Abilene Reporter-News)

AI is Transforming Education and Workforce

AI is reshaping how Texans learn, teach and prepare for future jobs. Demand for AI-related workforce skills is surging, and Texas must invest in bridging digital divides and expanding AI education.

• Educators’ Perspectives: 51% of teachers see AI positively influencing education, but 21% raise concerns about its misuse. (Source: AIPRM)
• Student Engagement: 86% of students globally use AI tools regularly in their studies. (Source: Digital Education Council, AIPRM, BestColleges)

Did you know??The Texas Workforce Commission is proactively planning for the future, including implementing strategies to manage the evolving impact of AI on the workforce.?(Source: Texas Workforce Commission Strategic Plan)

AI in Health Care: How its Impact is Saving Lives

AI is transforming health care by leveraging data for faster diagnoses, personalized treatments and improved efficiency, helping to bridge gaps in care across Texas.

• Enhanced Diagnoses: AI systems now achieve diagnostic accuracy rates as high as 84%, surpassing traditional methods. (Source: UCLA Health)
• Personalized Treatments: The University of Texas System integrates AI to tailor care plans and?optimizing therapies.?(Source: UT System)

Did you know? The University of Texas System, which produces over half of the state’s medical degrees, has secured $4 billion in research funding, partly dedicated to AI innovations in diagnostics, treatments and patient monitoring.(Source: Dell Medical School)

AI's Need For More Energy and Water

As Texas solidifies its position as a global leader in AI, the rapid expansion of data centers — essential to AI infrastructure — presents significant challenges to the state’s energy and water systems. Operating 24/7, these facilities require massive resources to power servers and maintain cooling systems, reshaping the state's infrastructure priorities.

• Massive Energy Demand: Large data centers consume over 100 MW each — equivalent to the annual energy usage of 350,000 to 400,000 electric cars. Their need for uninterrupted power often excludes them from ERCOT’s high-demand response programs, reducing grid flexibility during peak stress. (Source:?International Energy Agency)
• Significant Water Usage: A single mid-sized AI data center can consume roughly 300,000 gallons of water daily — comparable to the water use of 1,000 homes. Water use is critical for cooling systems to manage the immense heat generated by AI processing units. (Source:?NPR)

Monitoring the Risks of AI

Source: Facebook, deepfake detection challenge (2019)

To ensure an innovative, ethical and secure AI landscape, Texas will need to monitor and address critical risks head-on:

1. Privacy Concerns: AI systems rely on vast amounts of personal data, heightening the risk of misuse or unauthorized access.
2. Cybersecurity Threats: AI-driven cyberattacks, such as deepfakes or AI-enhanced hacking, threaten critical infrastructure and public trust.
3. Accountability and Regulation: There is a need for clear legal frameworks for AI systems that ensure accountability while harmonizing with AI innovation and growth.
4. Energy and Resource Strain: AI infrastructure, such as data centers, consumes vast amounts of energy and water, straining sustainability efforts.
5. Military and Security Risks: Weaponized AI and autonomous systems pose ethical and geopolitical concerns.

Did you know? Our 8th Texas Voter Poll found 47% of voters said state government should restrict its use of AI due to safety and privacy concerns. But?24%?wanted state government to develop AI to make government services more efficient.

?Texas AI Advisory Council on State Guardrails

Source: Texas 2036

In 2023, the Texas Legislature took a pivotal step toward responsible AI governance by establishing the Artificial Intelligence Advisory Council. Tasked with studying AI use in state agencies, the council aims to safeguard privacy, uphold civil liberties and promote ethical AI practices. The Council’s findings and recommendations, outlined in its official report, include:

• Annual AI Audits: All state agencies should conduct annual audits of their AI systems to ensure transparency, identify risks of bias or misuse and enhance accountability.
• Workforce Training: Equip public sector employees with targeted training on AI ethics, data privacy?and bias mitigation to responsibly manage AI technologies.
• High-Stakes Risk Assessments: Require documented assessments for AI systems in sensitive areas to evaluate societal and legal impacts, balancing innovation with public trust.

How the Texas Legislature is approaching AI

This legislative session, around 20 bills related to AI have been filed to date addressing topics ranging from the misuse of AI to protecting children’s privacy.

The bill to watch:

• The Texas Responsible Artificial Intelligence Governance Act?establishes regulations and reporting requirements for AI systems used by businesses and state agencies. (By?state Rep. Giovanni Capriglione, R-Southlake)

Other bills focus on:

• Use of AI by Health Benefit Plans
• Child Safety and Privacy
• Generative AI and Elections
• Cyberbullying and Digital Safety
• Civil and Criminal Liability

The Big Picture: AI will be a key focus in the Texas Capitol in 2025, with discussions shaping how machine learning and emerging technologies are managed in the future.

Stay informed on the Future of AI?

By fostering ethical practices, addressing risks, preparing the workforce and embracing technological advancement, we can ensure the AI-driven future benefits all Texans.Stay informed on issues like this at www.texas2036.org.

Let us know what you think! ??

Is Texas ready for the AI revolution? We want to hear from you on who can best position Texas for success with AI.?