3 Things I Learned Touring the First Stargate Data Center

An aerial view of the data center in Abilene, Texas. (Courtesy Oracle)

Key Points

• The Stargate Project, a partnership, plans to invest $500 billion over four years to build 10 gigawatts of AI capacity in the U.S.
• Data center locations are chosen based on available land, low-cost power, renewable energy access, and light regulation.
• The Abilene data center construction has brought increased traffic and housing competition, but also projected economic benefits over $1 billion.

The AI boom isn’t just transforming companies’ stock valuations; it’s reshaping entire swaths of land and surrounding communities.

That realization comes after I toured just a small part of the Stargate Project’s first data center, located in Abilene, Texas. Stargate, a partnership between OpenAI, Oracle, SoftBank , and the White House, aims to invest $500 billion over the next four years to build 10 gigawatts of capacity for AI operations in the U.S. Last week, the group announced it will construct five more data centers across the country.

The Abilene site alone is huge—1,100 acres to be exact. The sheer size of the place required a bus ride to tour. There is a single portion that is currently functioning, a one-story building about the size of a library. Seven additional buildings are being constructed.

Inside the building were enormous servers, tons of networking equipment, and liquid cooling systems used to handle hefty AI workloads. One fact that illustrates the sheer amount of material used to build this center: When the site is finished, the length of fiberoptic cable used could wrap around the Earth 16 times.

Inside the building that is currently in operation in Abilene. Photo: Courtesy Oracle

Spending time in Abilene also gave me the opportunity to talk with locals about how the data center has affected their day-to-day lives. Here are three takeaways from the trip.

Infrastructure Could Be a Limiting Factor

OpenAI CEO Sam Altman keeps calling for more infrastructure to power AI—and he views the issue as a potential ceiling for growth.

“What you saw today is just a small fraction of what this site will eventually be, and this site is just a small fraction of what we’re building, and all of that will still not be enough to serve even the demand of ChatGPT,” Altman said at a press conference at the data center.

Altman is also calling for this buildout before the uses for AI are there.

“Maybe with 10 gigawatts of compute, AI can figure out how to cure cancer. Or with 10 gigawatts of compute, AI can figure out how to provide customized tutoring to every student on earth,” Altman wrote in a blog post that was published hours before announcing the new data centers. “If we are limited by compute, we’ll have to choose which one to prioritize; no one wants to make that choice, so let’s go build.”

Location Matters

Deciding where these data centers are located takes meticulous planning. And states with plenty of available land, low-cost power, access to renewable energy, and a light regulatory environment look to be the most attractive spots.

According to Oracle, OpenAI, and SoftBank, the sites were chosen through a rigorous nationwide process that was launched in January. The three companies reviewed over 300 proposals from more than 30 states.

The five new data centers will be located in Shackelford Co., Texas; Milam Co., Texas; Lordstown, Ohio; Doña Ana Co., N.M.; and somewhere not yet announced in the Midwest.

Barron’s reporter Angela Palumbo at the construction site in Abilene. Photo: Courtesy Angela Palumbo

“Texas is ground zero for AI,” Texas Sen. Ted Cruz said during the press conference. His comments reflect what these companies are looking for in these states.

“You’re building AI data centers, what do you want? No. 1, you want abundant, low-cost energy. Welcome to the great state of Texas. If there’s one thing we know about, it’s energy,” Cruz said.

He added: “What else do you want? You want a regulatory environment of low taxes and low regulation, so if you’re trying to build something, you don’t have to go through 19 planning commissions measuring the size of your screws and bolts.”

Locals Feel the Changes—Both Good and Bad

Abilene is a city of about 130,000 residents that sits approximately three hours outside of Dallas.

There are about 6,400 workers who come to the construction site every day to build the data center. The sheer number of people was clear as we drove past giant parking lots that were filled with cars.

Abilene residents complain about the increase in traffic the site has brought. One Uber driver I spoke with in Abilene told me that he stopped accepting rides close to the data center during peak traffic hours, saying it wasn’t worth the hassle. Another Uber driver and Abilene resident told me that it took his son several months to find an apartment in the area because he was competing with workers for the site.

Other residents seemed excited about the rapid changes they have seen come to Abilene. Policymakers are also touting what these changes mean for the local economy.

At the press conference on Tuesday, Sen. Cruz said that the campus envisions there to be more than 1,700 jobs on site once the building of the data center is completed next year.

“The projected economic benefit to Abilene is over $1 billion in direct and indirect benefits,” Cruz said.

Write to Angela Palumbo at angela.palumbo@dowjones.com