This New Billionaire Will Tap Fracking Wastewater To Cool AI Data Centers
David Capobianco, co-founder of Five Point, is pursuing a multi-billion dollar strategy to attract AI data centers to West Texas by leveraging fracked oil wastewater for cooling. His companies are investing heavily in consolidating water assets and partnering with oil producers to provide water, cheap land, and natural gas to data center developers. This initiative aims to utilize a waste product for a high-demand industry in a water-scarce region.
David Capobianco, co-founder of private equity firm Five Point, is spearheading a multi-billion dollar initiative to establish West Texas, specifically the Permian Basin, as a prime location for AI data centers. His strategy centers on utilizing the vast quantities of wastewater produced by fracking operations in America's largest oil field for cooling data centers.
The Permian Basin, despite its arid climate, generates 25 million barrels (1 billion gallons) of highly saline and mineral-laden wastewater daily, which historically has been costly to dispose of. Capobianco's firms, including portfolio companies like Deep Blue, WaterBridge, and San Mateo Midstream, manage 6 million barrels of this wastewater daily through extensive pipeline networks and over 300 processing facilities across Texas and New Mexico. They aim to convert this waste product into a valuable resource for data centers, which are significant water consumers.
In addition to the abundant wastewater, West Texas offers low-cost land and the world's cheapest natural gas, making it an attractive location for energy-intensive data centers. Five Point and its affiliates have already invested approximately $2.5 billion, with plans to inject up to another $5 billion over the next five years into this venture. The firm partners with oil companies like Matador Resources and Diamondback Energy, integrating water and natural gas infrastructure to create a comprehensive ecosystem for data center development.