In West Texas, AI startup Poolside and cloud computing company CoreWeave are moving forward with plans to develop a large-scale data center complex named Horizon. The facility will be built on 500 acres of the Mitchell family’s Longfellow Ranch, located above the Permian Basin, which is recognized as the country’s most active oil field.
The project will utilize natural gas sourced directly from the site to power its operations. This approach reflects a broader trend among artificial intelligence firms aiming for greater control over their infrastructure due to increasing demand and limited chip supply.
Horizon is part of ongoing consolidation in the data-center industry. Recently, Aligned Data Centers, based in Plano and operating 50 campuses across the Americas, was acquired by a consortium led by BlackRock and Nvidia for $40 billion. This transaction stands out as one of the largest within the sector (https://www.dallasnews.com/business/technology/2024/06/07/plano-based-aligned-data-centers-sold-to-blackrock-nvidia-consortium-in-40-billion-deal/).
Poolside and CoreWeave intend for Horizon to generate its own electricity—a distinctive strategy at a time when access to power has become a significant obstacle for data centers. CoreWeave is set to anchor the first 250 megawatts of capacity at Horizon, with expectations that it will become operational late next year. There are also plans to expand capacity by an additional 500 megawatts.
On-site energy generation is intended to address grid constraints that have affected other Texas data center projects. Energy regulators in Texas now have authority to limit large users during shortages.
Poolside co-founder Eiso Kant commented on current challenges: “the ability to deploy infrastructure quickly is now ‘the real physical bottleneck’ in AI development.” The companies plan to use modular construction techniques and take advantage of nearby energy resources in order to reduce costs and speed up completion times. According to Kant, constructing a 2-gigawatt facility would typically require about $16 billion, not including Nvidia’s advanced chips.
Poolside is currently engaged in a $2 billion fundraising round that could raise its valuation from $3 billion last year to $14 billion this year. The company joins others like xAI and OpenAI as they compete for expanded computing resources.
Another significant development in West Texas includes “Project Matador,” spearheaded by Rick Perry’s Fermi Real Estate Investment Trust (REIT). This initiative aims to establish a 5,000-acre campus supporting advanced energy solutions—targeting data center tenants—with ambitions for 11 gigawatts of power from various sources by 2038 on land leased from Texas Tech University.
The current landscape demonstrates how technology firms are seeking new ways to address rising demand for artificial intelligence infrastructure while navigating constraints related to power supply and hardware availability.
