$500 Million Data Center Near San Antonio Adds to Texans’ Fight Over AI Expansion
CyrusOne is developing a $500 million data center near Castroville, Texas, which is raising concerns about electricity demand, water use, and environmental impacts. This development comes as Texas officials, led by Gov. Greg Abbott, are scrutinizing data center expansion and have paused approvals for projects seeking grid connections. The state is examining how AI infrastructure will affect the state's resources and existing communities.
A new $500 million data center project by CyrusOne near Castroville, Texas, known as SAT14A, is contributing to a broader debate in Texas over the rapid expansion of artificial intelligence infrastructure and its impact on the state's resources.
The 460,000-square-foot facility, located at 3397 U.S. Highway 90 West in Medina County, is scheduled for completion in June 2027. This project is part of a significant data center boom across the San Antonio region and Texas, driven by the demand for AI and cloud computing.
The Electric Reliability Council of Texas (ERCOT) reported tracking 474 gigawatts of proposed large-load projects, predominantly data centers, seeking to connect to the state grid. This unprecedented scale has prompted state officials to re-evaluate grid planning and ensure reliability for existing customers. Critics, including State Rep. Gina Hinojosa, have expressed concerns that the state's current oversight is insufficient.
Responding to growing pressure, Gov. Greg Abbott has directed the Public Utility Commission of Texas (PUCT) and ERCOT to conduct a comprehensive review of data centers seeking grid connections, effectively pausing approvals. This review will collect data on expected tax incentives, electricity and water demand, cooling systems, and community impact, with non-compliant projects to be denied grid access. CyrusOne has publicly stated its commitment to investing in electrical infrastructure and utilizing closed-loop cooling to mitigate water consumption, distinguishing its projects from more speculative ventures.