Locator: 51351TEXAS.
Now more than ever, the global economy runs through Texas. The boom is happening down at the state’s southern tip, where SpaceX
SPCX
launches rockets from a beach just miles from the Mexico border. It’s in full swing in the east, where ports in Houston and elsewhere are shipping a record amount of oil and natural gas to the world. There’s a gold rush in the north, too, as Dallas transforms a banking backwater into a bona fide financial hub, and in the west, where tech companies are building their biggest artificial-intelligence data centers yet.
Beckoned by a growing population, abundant natural resources, nonexistent income taxes, and light regulation, companies from Oracle to Tesla
TSLA
to Caterpillar have relocated their headquarters to the state. Texas passed California this year as the home of the most Fortune 500 companies, with 57. For three years running, Texas has added more jobs than any other state. It has the eighth-largest economy in the world and is hot on the heels of France for seventh place.Texas is also well positioned to lead the U.S. in the next phase of
economic growth, driven by AI. It’s closer than any other part of the
country to solving the technology’s biggest bottleneck: energy.
Texas is building more natural-gas power plants than the next seven
states combined, according to energy data provider Global Energy
Monitor. It’s the leading state for renewable-energy generation, too,
with wind and solar arrays going up much faster than even in
climate-friendlier jurisdictions like the Northeast. Texas’ power grid
operates as an island disconnected from its neighbors, which has left it
stranded during some weather emergencies but also allowed for flexible
regulations that have spurred aggressive private investment.
The state is experimenting with a kind of hypercapitalism, one whose impacts are likely to be felt around the country. Its innovations are attracting imitators, who see its success as a blueprint for how to spur economic growth. But the model has also drawn a backlash. Deregulation, critics say, has stacked the deck in favor of corporations, and led to a “race to the bottom” that will impact everyone from shareholders to employees. Texas’ growth is also hitting physical limits. In parts of the state, water supplies are running out. The data-center boom threatens to sap them even more.
One place to see Texas’ growth spurt is at the base of a half-built tower rising at the center of downtown Dallas. When the 30-story building is completed next year, it will house Bank of America’s regional headquarters and the recently opened Texas Stock Exchange, which plans to install a rolling stock ticker on the side of the building. “There’s no street called Y’all Street,” said Linda McMahon, the head of the city’s Economic Development Corporation, a civic booster. “But this is kind of what it is.”
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The vast majority of U.S. companies are incorporated in Delaware, whose long history in adjudicating business disputes seemed to insulate it from competition. But a Delaware judge’s 2024 decision to deny Elon Musk’s $56 billion Tesla pay package upset the Tesla CEO and helped spur a backlash. Musk moved Tesla’s legal incorporation to Texas, whose rules are considered friendlier to corporations than Delaware’s.
n Texas, companies can block investors who own less than 3% of their shares from submitting shareholder proposals and filing certain kinds of lawsuits. Texas has also passed rules to curb the power of proxy advisors, which sometimes tell investors to vote against corporate policies. The state has also set up its own business courts that “deliver experienced judges and greater certainty for complex commercial disputes,” according to Gov. Greg Abbott.
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The state sees stock trading as the next step for it to become a certified financial capital, on par with or even above New York. The Texas exchange got up and running as a stock trading venue in July, though it’s still working on procuring its own listings. The exchange is on board with the Texas-ization of corporate America, says James Lee, CEO of the Texas Stock Exchange. Removing wasteful fees and onerous rules should draw more companies to public markets, he says. A stock listing is the next step to getting all the benefits of Texas’ pro-business environment. “The Texas Stock Exchange is a partner in this—lowercase p—but we have similar goals,” he says.
Nasdaq and the New York Stock Exchange have ramped up their own presence in Texas, too—SpaceX was dual-listed on Nasdaq’s New York and Texas exchanges. Nasdaq launched its exchange in March. Nasdaq Texas President Rachel Racz tells Barron’s the decision to open the Texas venue was “more a response to our clients than a competitor.” From a practical perspective, however, Nasdaq Texas doesn’t change much for the firm’s clients, whose trades run on East Coast wires and technology. It “allows companies to establish a listings presence in Texas while maintaining all of the benefits of their Nasdaq listing,” she says. From a liquidity perspective, the Texas exchanges are still a blip, accounting together for less than 1% of U.S. equity market volume.
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And the article goes on and on and on.
