In this week's issue:

  • Texas's power grid has 410+ gigawatts of AI data center requests in the queue — five times the entire state's peak capacity
  • Austin City Hall has 176 communications staffers across 28 departments — and they don't communicate with each other — while the city bleeds $26M in budget red ink
  • Austin defense startup just hit a $2.2 billion valuation by making drone-killers that cost $10 per engagement
  • Two prominent Austin hotels foreclosed and a homebuilder sold at auction — the real estate market is separating winners from wishful thinkers
  • Texas just deregulated food trucks statewide, effective July 1 — one license to rule them all

Texas doesn't do things small. Let's get into it.

Top Stories

Texas Has 5x Its Entire Grid Capacity Sitting in a Power Queue — and It's 87% AI

The question everyone should be asking about Austin's AI and data center buildout isn't "can we build the buildings?" It's "can we power them?" ERCOT's April 2026 filing to the Texas House State Affairs Committee revealed approximately 410-415 gigawatts of new power connection requests sitting in the large-load interconnection queue — with 87% of those requests tied to AI data centers. By the time ERCOT's board voted on June 3, that number had grown to 438-450 GW. For reference: Texas's all-time peak demand record is 85.5 GW, set in August 2023. ERCOT forecasts summer 2026 will push above 92 GW. The queue, in other words, is asking for more than five times the state's entire peak capacity — and climbing. Energy analyst @BarrioEnergy nailed the absurdity: "One number is real. The other is a wish list."

The good news is ERCOT isn't naive about this. On June 3-4, the board approved a new batch-study process called Batch Zero — replacing an untenable sequential review system that was grinding to a halt. Batch Zero sets hard qualification criteria: nonrefundable fees, site control, and proof of financing. ERCOT VP Jeff Billo estimates roughly 100 GW of projects are mature enough to qualify; the rest are speculative plays holding spots in line. CEO Pablo Vegas has already walked back the eye-popping 228 GW by 2032 projection, calling it "too high based on realistic expectations." The Texas PUC's Thomas Gleeson is scheduled to vote on final Batch Zero approval on June 18. A second rule package requires data centers to "ride through" brief grid disruptions or face disconnection — the industry is pushing back, but the grid math is unforgiving. UT research scientist Joshua Rhodes put it plainly: "I haven't really believed the numbers for two years now."

For Austin specifically, this is the most consequential regulatory development in the infrastructure buildout right now. Every data center project in the pipeline — the roughly 30 facilities in Williamson County, EdgeConneX's Bastrop County campus, Terafab near Giga Texas — is waiting in this same queue. No rules for batches beyond Batch Zero will even be developed until February 2027. The projects that survive Batch Zero qualification will get studied; the rest face an indefinite wait. Texas currently has roughly 7.4 GW of data center load operational. The gap between that and the 438 GW in the queue isn't ambition — it's physics. Austin is betting its next decade on the assumption that the power shows up. The Batch Zero vote on June 18 will tell us how fast that bet gets stress-tested.

Sources: ERCOT Large Load Update — April 2026 House State Affairs Hearing, E&E News by POLITICO — Texas advances major grid rules for data centers, Houston Public Media — ERCOT votes to streamline process for data centers, Bisnow — Texas Grid Operator Approves New Rules for Data Centers, @WT_Trending on X, @BarrioEnergy on X

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Austin Has 176 Communications Staffers Who Don't Communicate With Each Other

A new city report released this week confirms what anyone who has dealt with Austin City Hall already suspects: the place is a bureaucratic maze with no one minding the map. 176 communications staffers are spread across 28 departments, operating without a shared strategy, inconsistent performance metrics, individually tracked advertising budgets, and no coordination. Each department defines its own campaigns differently, buys media on its own, and measures results however it sees fit. Combined, they account for $10.4 million in reported marketing and communications spending over two fiscal years. The report was released as part of City Manager T.C. Broadnax's Shared Services Optimization initiative — which is government-speak for "we finally noticed this is insane."

The timing is not subtle. Austin is staring down a $26 million budget shortfall, and the city commissioned this audit to see whether internal functions could be "delivered more consistently and cost-effectively." The report doesn't recommend layoffs and doesn't attach a dollar figure to potential savings — which tells you something about what kind of document this is. It describes the dysfunction but stops well short of prescribing the cure. No city council response is on record. The audit exists; the accountability doesn't, yet.

This is what government sprawl looks like at the granular level. Not dramatic waste — just 176 people doing the same job 28 different ways with no one in charge. The $10.4 million figure is almost beside the point; the structural incoherence is the story. Every dollar Austin saves by consolidating this function is a dollar that doesn't have to come from services people actually use. Whether City Hall has the political will to act on a report it commissioned is a different question — and the more interesting one.

Sources: Austin American-Statesman — Austin reviews communications spending amid $26M budget shortfall

Weird Austin

One Thing

The infrastructure question has shifted. It's no longer "can we build the data centers?" It's "can we power them?" Watch the June 18 PUC vote on Batch Zero — that's the one that actually matters.

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