Location is about power, not geography

Happy Tuesday Brex Community,

I just returned from San Francisco, where one dinner conversation led to an investing discussion centered on: Which state will have a breakout year in 2026?

Several states came up—Florida, Tennessee, California. But I made the case for Texas, and here's why you should be paying attention.

The Foundation Is Already There

The numbers tell a story most people are missing:

• 2nd highest GDP growth rate of any state

• 2nd most Fortune 1000 headquarters

• Lowest median home value among major states (NY, CA, FL, TX)

But that's table stakes. What's happening beneath the surface is far more interesting.

The AI Infrastructure Play Everyone's Overlooking

While everyone obsesses over the application layer and chip manufacturers, there's a critical bottleneck forming: data center capacity. Training and running LLMs requires massive amounts of power—power that most states simply can't deliver at scale.

Texas can.

The state has assembled a unique energy cocktail that no other region can match: oil, solar, natural gas, and nuclear power, combined with abundant cheap land and crucially, deregulation that allows rapid deployment. While California debates permitting and the Northeast patches together aging grids, Texas is building the infrastructure that will power the next decade of AI innovation.

The Second-Order Effects No One's Talking About

Here's where it gets interesting: building data centers and energy infrastructure requires an enormous workforce. We're talking thousands of construction jobs, operations roles, and support services, all paying well above median wages.

This creates a flywheel: high-paying jobs → disposable income → economic growth → more companies relocating → more jobs. Texas isn't just benefiting from the AI boom; it's creating a durable economic expansion that compounds over time.

What This Means for You

Whether you're in enterprise sales, consumer products, or financial services, the customer base in Texas is expanding rapidly and it's not just growing, it's upgrading. The influx of high wage tech and energy workers is fundamentally changing the state's economic profile.

If Texas isn't on your 2026 roadmap yet, it should be. The question isn't whether your competitors will be there, it's whether you'll be there first.

Have a great week,

Shai Goldman

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