The AI Power Crisis Begins in Texas

Texas is in an undeclared war over electricity. The enemy isn’t nature. It’s Nvidia.

AI isn’t just “eating the world.” It’s devouring the grid. While the rest of the country is still debating whether AI is the next iPhone or the next industrial revolution, Texas is past the debate stage. It’s living the consequences in the form of blown-out load curves, transmission bottlenecks, and black-box loads that refuse to shut off.

This isn’t abstract. It’s structural. If you want to understand the real limits on AI’s expansion—not the fantasy deck from a VC, but the hard ceiling on what can actually be built—you don’t start with chips or model weights. You start with the electrical grid. Specifically: ERCOT, the only grid in America arrogant enough to go it alone, and now paying the price.

ERCOT is the Galapagos of Power Markets

ERCOT is the nerve center of the Texas electrical grid. The Electric Reliability Council of Texas operates the state’s self-contained power market, which is unlike any other electrical grid in America.

Most of the country is plugged into one of two massive grids—the Eastern or Western Interconnects. But Texas? Texas said no thanks. ERCOT manages ~90% of the state's electricity demand, with minimal federal oversight and no interconnection with the rest of the U.S. grid.

Think of it as the Galapagos of energy markets: isolated, weird, and now evolving at breakneck speed.