{"id":389298,"date":"2026-07-28T16:46:17","date_gmt":"2026-07-28T16:46:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/389298\/"},"modified":"2026-07-28T16:46:17","modified_gmt":"2026-07-28T16:46:17","slug":"galaxys-500-acre-texas-ai-data-center-reflects-new-grid-model","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/389298\/","title":{"rendered":"Galaxy\u2019s 500-Acre Texas AI Data Center Reflects New Grid Model"},"content":{"rendered":"

Galaxy Digital\u2019s latest Texas AI data center project reflects a shift in how utilities and regulators view massive AI loads, as developers are increasingly expected to both fund grid upgrades and prove their demand is real before utilities build around them.<\/p>\n

The operator said Tuesday that it has acquired 500 acres in McGregor, around 90 miles north of Austin, where it plans to develop an AI and high-performance computing campus. The project, known during McGregor City Council deliberations as \u201cProject Merlin,\u201d is expected to reach 74 MW in its first phase before expanding into a multi-hundred-megawatt campus through 2030 as additional transmission infrastructure comes online.<\/p>\n

The project is Galaxy\u2019s second major Texas AI campus after its 1.6 GW Helios development<\/a> in Dickens County. But unlike many campus announcements, Galaxy emphasized commitments to privately fund an on-site electrical substation, provide financial assurances for utility upgrades and pay for additional water infrastructure required under its development agreement with the City of McGregor.<\/p>\n

Related:Data Centers\u2019 Next Hurdle: Winning Public Trust and Social License<\/a><\/p>\n

The project also mirrors changes in Texas policy recently reported by <\/a>Data Center Knowledge<\/a>. Last month, Gov. Greg Abbott directed the Public Utility Commission of Texas and ERCOT to develop rules requiring data center developers to pay for required electric infrastructure while strengthening oversight of water use and other impacts.<\/p>\n

According to Galaxy\u2019s presentation to the McGregor City Council, many of the project\u2019s commitments, including privately funded electric infrastructure, closed-loop cooling<\/a>, contractual water-use caps and noise limits, had already been negotiated before Abbott issued the directive.<\/p>\n

Inside Galaxy\u2019s McGregor Campus<\/p>\n

Galaxy said its latest campus will be developed with the McGregor Economic Development Corporation and Heart of Texas Electric Cooperative. The company expects the first phase to begin receiving power in 2028 before pursuing expansion above ERCOT\u2019s 75 MW large-load threshold.<\/p>\n

Utilities are increasingly concerned about committing billions of dollars to transmission and substation upgrades for projects that could be delayed, downsized, or never built<\/a>.<\/p>\n

\u201cThe emerging model is moving from \u2018beneficiary pays\u2019 to \u2018beneficiary proves,\u2019\u201d Neil Osnato, founder of Persistence Analytics Group, told Data Center Knowledge. \u201cDevelopers are increasingly being asked not only to fund the infrastructure they cause, but to prove that the underlying load is durable enough to justify the grid being planned around it.\u201d<\/p>\n

Related:Texas May Have Accidentally Built the Perfect Grid for AI<\/a><\/p>\n

\u201cWe\u2019ve spent the last several years proving in Dickens County that a privately funded data center can be a real, long-term partner to a rural community,\u201d Galaxy Founder and CEO Mike Novogratz said in a statement. \u201cMcGregor is the next step in our strategy to build a disciplined, multi-campus data center business.\u201d<\/p>\n

According to Galaxy\u2019s presentation to the McGregor City Council, the project represents more than $400 million in planned investment, will create at least 30 full-time jobs with average annual salaries exceeding $60,000, and is expected to include six to eight data center buildings.<\/p>\n

The presentation says the campus will cap water consumption at approximately 3,000 gallons per day per powered shell, and limit noise to no more than 65 dBA at the property boundary through a multi-layered \u201cbox within a box within a box\u201d building design with 11-inch precast concrete walls.<\/p>\n

Under the development agreement, Galaxy will finance and build its own private substation while providing the financial security required for utility upgrades associated with the project. Company officials also told the council the second phase is intended to position Galaxy as an \u201canchor tenant\u201d supporting future transmission upgrades that could accommodate additional industrial development in the region.<\/p>\n

Related:What Is Phased Energization, and When Should Data Centers Adopt It?<\/a><\/p>\n

Proving the Load<\/p>\n

Osnato said those commitments address only part of the challenge facing utilities as AI campuses continue to grow.<\/p>\n

\u201cPaying for the substation solves cost causation,\u201d he said. \u201cIt does not solve demand verification.\u201d<\/p>\n

The analyst noted that utilities are placing greater emphasis on whether proposed AI loads are backed by committed customers, financing, site control, permits and construction milestones before making long-term grid investments.<\/p>\n

Unlike many developers proposing AI campuses, Galaxy enters McGregor with a large-scale project already under deployment. Earlier this month, the company said its Helios campus had delivered roughly 200 MW of gross power, including 133 MW of critical IT load, under a long-term lease with CoreWeave.<\/p>\n

According to Galaxy, the development will add at least $130 million to McGregor\u2019s property tax base, generate approximately $7.5 million in land-sale revenue for the city, create several hundred construction jobs and operate without a property tax abatement.<\/p>\n

Galaxy\u2019s McGregor campus suggests that as AI developments grow into the hundreds of megawatts, developers will compete not only for power but also for the confidence of utilities willing to build around them.<\/p>\n","protected":false},"excerpt":{"rendered":"Galaxy Digital\u2019s latest Texas AI data center project reflects a shift in how utilities and regulators view massive…\n","protected":false},"author":2,"featured_media":389299,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[27,29,28],"class_list":["post-389298","post","type-post","status-publish","format-standard","has-post-thumbnail","category-texas","tag-texas","tag-texas-headlines","tag-texas-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/389298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=389298"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/389298\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/389299"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=389298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=389298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=389298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}