Listen
It seems like every day, you hear a new story about data centers.
But beyond the hype, what do we know about them? What are they? Why are so many being built right now? And who gets to decide where they go?
Today, Austin Signal has a special 1-hour show focused on data centers. It’s a special KUT News series called The Data Center Next Door.
The show compiles five stories from KUT county reporters Leigh Walden, Katy McAfee and Kailey Hunt.
You’ll hear how the data center saga is playing out in Texas, the state where more data centers are being planned than anywhere else in the country.
Austin Signal is made possible by listeners like you. You can support our work by making a donation at supportthispodcast.org
The full transcript of this episode of Austin Signal is available on the KUT & KUTX Studio website. The transcript is also available as subtitles or captions on some podcast apps.
Le
Jerry Quijano Data centers are everywhere these days, with more than 300 currently operating here in Texas and hundreds more planned in the coming years. But across the Austin area and the state as a whole, data centers are running into some stiff opposition these days. So when we stop for a moment to look beyond the hype, what do we really know about data centers? Why are so many being built? And who decides where they go? Some of the answers coming up on today’s show.
Laurie Gallardo The Austin Signal is a production of KUT News, hosted by Jerry Quijano.
Jerry Quijano A team of reporters at KUT News has been taking a close look at data centers over the past couple of months, trying to get a deeper understanding of what they do, the resources required to make them go, and the promises not always kept that go along with them. Our one-hour special, the data center next door, that’s up next. It’s right here on Austin Signal. This is Austin Signal, I’m Jerry Quijomol. Today we’ve got an hour long special all about something that’s been all over the news lately. The series is called The Data Center Next Door. KUT’s Kaylee Hunt, Lee Walden, and Katie McAfee have been looking at the fight over data centers in central Texas for the past couple of months and they’re with us now. Thanks so much for being here.
Kaylee Hunt Thanks for having us. Thanks, Jerry. Hey, Jerry!
Jerry Quijano Why did we decide to do an entire series about data centers? Lee, I’ll start with you. Why did, why did we take this up?
Kaylee Hunt Yeah, in Hayes County, this is something that comes up in city council meetings, county commissioner meetings. It’s everywhere. Rural areas across central Texas are facing down what it looks like when trillion-dollar tech corporations suddenly want to build these massive facilities that people don’t necessarily understand. This is an issue that’s impacting a lot of folks in Texas across party lines, across class lines, and it’s an exciting topic and it is a very personal topic to a lot of folks.
Jerry Quijano Okay, Lee, you’ve done some reporting on your beats as Williamson County reporter. What more did you learn about data centers that you really couldn’t have maybe anticipated knowing two or three months ago?
Leah Walden I mean, I’ll be honest, I’m like a lot of folks, prior to these stories popping up on my beat, I really didn’t know what a data center was, what its purpose is, how it all works.
Jerry Quijano Now, Katie, when you’re working with a group like you did with Kaylee and Lee this time, how much easier does it make it to find those answers?
Katie McAfee Oh my gosh, we all have different areas of expertise. So it’s been really nice coming together in one room where we’re writing the story and talking about what’s the most salient thing that we’ve experienced going out and reporting.
Jerry Quijano All right, well, let’s clear the report that y’all have developed. It’s clear in this conversation and it’s clear and the stories that you have reported. So thank you again. The series is called The Data Center Next Door. So enjoy what we’re about to bring you. Thank y’ all.
Kaylee Hunt Thank you, Jerry. Thank you.
Jerry Quijano Let’s start with the basics. We hear the words data center, but what actually is a data center? Katie, Kaylee, and Lee, start us off right there.
Kaylee Hunt The machine humming in the computer visualization lab at UT Austin is soft, almost a friendly purring. Today, the 20 or so TV-sized monitors are lit with graphs and human body scans glowing with saturated colors.
Katie McAfee We’re meeting a man who has spent his career working to, well, cure cancer.
Tom Yankilov Hi, my name’s Tom. Thank you for taking time to meet with me. It’s a delight to be here. First time caller, long time listener.
Kaylee Hunt Tom Yankalov is not what you might picture when you imagine a cancer researcher. There’s no white coat and latex gloves. He’s just wearing a t-shirt with a flannel over it. Yankilov isn’t a medical doctor. He doesn’t work directly with cancer patients. He kind of just does a lot of math.
Tom Yankilov This is the rate of change of the number of tumor cells at position x and time t, and that is equal to how the cells are moving around. That’s given by a diffusion term.
Katie McAfee Yankalov’s lab uses physics models that are built on a ton…
Kaylee Hunt Of data. Data from patients, data from existing cancer treatments, data from how tumors move around and grow and respond to drugs. Lots and lots of data! A computer crunches all of that data and comes up with predictions for how a tumor and a cancer patient will grow, and more importantly, how a tumor will respond to different types of treatment. But it didn’t happen overnight.
Tom Yankilov It took us 10 years basically to get from the idea on a whiteboard to a system of equations that we could populate with data we could measure and then show that it had very good predictive accuracy. You have to have computers that are fast enough that can actually do these computations to solve these partial differential equations, these systems of partial differential equation on a grid size that’s the size of say the human brain for example.
Kaylee Hunt Their research needs powerful computers to make these predictions. And there’s one place on campus that has those kinds of machines. It’s called the Texas Advanced Computing Center, or TAC, and it’s UT Austin’s data center.
Niall Gaffney You can see here what our data center looks like. It’s just racks of computers with a lot of cooling.
Kaylee Hunt That’s Niall Gaffney. He took us on a tour of TAC with his colleague Tommy Menyard last March. We wanted to see what exactly goes on inside a data center. Peering through a glass pane, it looks just as Gaffne described it. A big room filled with rows and rows of computers. It looks like something out of a sci-fi.
Katie McAfee Gaffney had a warning for us before we actually stepped inside, and it’s a good warning for our listeners too.
Niall Gaffney Be careful with the headphones, because when it gets loud, people aren’t supposed to wear hearing aids in there, for example.
Kaylee Hunt We opened the door to go inside. He wasn’t kidding. It’s extreme.
Katie McAfee Extremely, almost painfully loud inside. The loudest parts of the room reach up to 100 decibels. That’s like having your ear next to a running chainsaw.
Kaylee Hunt It’s coming from hundreds of cooling fans that make sure the stacks of computers don’t overheat. Cooling is a big problem for data centers. We’ll get more into that in the second story in our series.
Katie McAfee At first, the air inside the room was uncomfortably cold. A few steps later, it gets hot.
Kaylee Hunt Then cold, then hot again. Gaffey’s colleague, Tommy Minyard, says it’s like this on purpose. This setup helps them save energy.
Tommy Minyard Basically what you do is you put the racks back to back so all the hot air is in one location and then the cooling units can pull all the hot air out and blow cold air to the front. So this actually keeps the hot and the cold air separate so it improves the overall efficiency of the cooling.
Kaylee Hunt We keep walking through the room.
Katie McAfee Lights illuminate the rows of hot and cold. Wires weave in and out of server racks that blink with blue and red and white and green bulbs like Christmas lights. As we leave the room the humming feels like it’s following us.
Kaylee Hunt Most of the servers at TAC are busy crunching data that scientists use to study things like climate change, medicine, and even-
Katie McAfee outer space. TAC processed some of the images of the earliest galaxies from the James Webb telescope.
Kaylee Hunt Other data centers are used for storage, everything from bank transactions to medical records to memes shared on social media.
Katie McAfee But more and more are being built for AI. And those data centers need more of everything, more space, more power, and more water. But why? The data center…
Kaylee Hunt Of the past have mostly been doing things like Google searches. When you search something on Google, a little robot goes into an index of everything it’s seen on the internet, like a card catalog in a library.
Katie McAfee Find the page on the internet that answers your question. But when you ask an AI chatbot a question, the robot pulls from its own memory all the information it’s been trained on, and gives you what it thinks is the most likely answer. It’s like if you ask a AI…
Kaylee Hunt What’s one plus one? That’s pretty easy. But there’s harder questions out there. Like if you ask an AI how to deal with my difficult in-laws, it’s going to have to work way harder to find an answer. And this takes…
Katie McAfee More computers. Which takes more data centers. Which takes more space. And guess who has that space?
Leah Walden Texas is becoming ground zero for the development of data centers known as the backbone of digital infrastructure. So why is Texas a magnet for new data centers?
Mike Comerlander Our track record says this is a good place to do any type of development and data centers are no different.
Kaylee Hunt This is Mike Comerlander. He’s the president and CEO of the Hayes-Caldwell Economic Development Partnership. Comerlander’s work brings him close to the data center boom, overseeing developments throughout the southwestern part of the Hill Country.
Mike Comerlander Texas has a number of things going for it. First of all, Texas is big. It has a lot of land and it has it at scale, right?
Kaylee Hunt Data center campuses can consist of several warehouse size buildings. The more buildings you can build next to each other, the more computers you can have. Then you need electricity to run those computers.
Mike Comerlander The ERCOT grid generally allows faster interconnection.
Kaylee Hunt Most of the United States runs on big multi-state power grids.
Katie McAfee But not here. Texas has its own grid, which allows big energy users to get plugged in and connected faster. Plus, Texas is kind of known for being business friendly.
Mike Comerlander Regulatory climate that is known and predictable.
Katie McAfee All of these factors make it attractive to developers looking to build some of the biggest data centers in the country. Even UT’s data center is expanding. They’re building a new one in Round Rock. We took a trip to see how the project is going. It’s still in the early stages, but its concrete walls already tower over the condos and swimming pool that sit across the street. I don’t know how many square footage it is, but it’s insane. Christina’s sweater can see it from her kitchen. It just kept getting higher and higher and wider and it just never seemed to stop. As you can see, it goes on almost forever.
Kaylee Hunt Like a concrete monolith. When she moved in a couple of years ago, there was already one smaller data center across the street. She was fine with the old one, but the new one, not so much.
Kaylee Hunt Stretches of land where Tesla is and Amazon is and no residentials are really there at all. Why couldn’t the monolith been constructed there. Schwatter says she worries that once it’s finished, the new data center will affect her utility bills and her ability to sell her home in the future.
Leah Walden Will it be pulling from our water resources? Will it pulling from electricity as well?
Jerry Quijano You’re listening to Austin Signal. I’m Jerry Quijano. We’re spending this hour on a reporting project called The Data Center Next Door from KUT’s county reporters, Kaylee Hunt, Katie McAfee, and Lee Walden. Texas Governor Greg Abbott last month called for a pause on data center development in the state. He ordered an audit of how much power and water each of these projects need. Water and electricity are two of the major factors in the opposition to data centers. But how much of those things do they actually use, and what does that mean for the rest of us?
Katie McAfee Tori Martin’s horses run straight for her when they spot her at the top of the hill. Stepping out of the truck, Martin.
Kaylee Hunt Is immediately surrounded. Each horse is vying for attention, whinnying and nudging her with their noses. Martin has been raising animals her entire life.
Tori MartinTaught me a lot of patience. Things don’t always go your way. You just try again. You ask more politely maybe. Asking firmer doesn’t usually get the job done.
Katie McAfee These days, Martin is learning how to ask for.
Kaylee Hunt Things firmer. And she’s becoming increasingly impatient, with some humans at least. Particularly the humans who want to build a data center next to her ranch just outside San Marcos.
Tori MartinWe’d be backing up to our fence line for about 40 acres this direction and it would be an AI data center.
Katie McAfee The developer proposed the data center about a year ago. Since then, Martin’s been working alongside activists in the area to try to fight it.
Tori MartinLand is the only thing they’re not making more of and I would, you know, hate to not be able to raise kids in the same environment I was able to be raised in.
Kaylee Hunt There’s lots of development happening around Martin’s ranch, and it’s been putting stress on nearby infrastructure. Her neighborhood already deals with brownouts and water outages. Martin blames it on all the new building in the area. If a data center moves in, she’s worried…
Katie McAfee The county keeping up. She’s not the only one.
San Marcos official I call this regular meeting of the San Marcos City Council to order. Today is Tuesday.
Kaylee Hunt It’s February of this year, hundreds of people spill onto the lawn outside of San Marcos City Hall.
San Marcos Official Mr. Rodriguez here. Mr. Garza.
Kaylee Hunt The council chambers themselves are.
Katie McAfee Packed. So is the overflow room and the lobby. The council is set to discuss the development behind Martin’s Ranch.
Kaylee Hunt The clipboard where people sign up for public comment has a thick stack of pages with line after line of names. On it are business owners, students, parents, just regular people, Democrats and Republicans. Most have come to oppose the data center. Their methods of persuasion vary.
Katie McAfee You say no to this, and there is a grand celebration. Everyone in the yard is happy. People are gonna go jump in the river. They’re gonna go out. People are going to get laid tonight if you say no. Needless to say, hundreds of speakers at the meeting are passionate. They’re worried about how a data center will change the culture of the town.
Leah Walden We are sacrificing our identity as a city. They’re worried about their energy bills.
Kaylee Hunt Electricity bills go up.
Kaylee Hunt That will be on all of you that have voted yes to this. But they’re mostly worried about water.
Leah Walden Center’s to assume vast quantities of water. I am incredibly concerned about future water security.
Citizen I want y’all, put y’alls money where your mouth is because you’re literally taking water out of our mouth. In my culture. Agua es vida, meaning water is life. Water. Water. Water. Water. Water. But how much water do data centers actually use? Does anyone really know?
Kaylee Hunt We called Margaret Cook to find out. She researches water supply at the Houston Advanced Research Center.
Margaret Cook Clear answer to the general question is it depends.
Katie McAfee It depends on two things, how big a data center is and how it’s cooled. Remember.
Kaylee Hunt Servers in a data center run constantly and generate a ton of heat. And that heat needs to be dissipated somehow, or the computers can burn out in minutes. Most data centers either use air or water to cool it.
Katie McAfee Cook says air works fine for data centers built in cold climates, but it’s hot in Texas.
Margaret Cook Water is much more efficient at cooling than air is. That’s why on a hot day, you’d probably rather jump in a pool than stand under a tree.
Kaylee Hunt Many data centers rely on what’s called evaporative cooling. That’s where water absorbs heat from the servers, causing it to evaporate. Cook says evaporative-cooling is an energy-efficient way of cooling a data center, but it uses a ton of water. Then there’s a closed-loop system. In a closed loop, a cooling gets looped through a data-center, pulling heat off of servers. As the fluid moves through the system, it gets hotter and hotter, and something else needs to cool it back down for the closed loop to work. Cook says to think about your body as an example.
Margaret Cook You can’t cool down unless something takes heat off of you. So you’re gonna sweat and the wind’s gonna or the air is gonna pull the sweat off of you and that’s how your body cools. And then your skin and your blood cool down. And that’s a closed loop system.
Katie McAfee Cook says more and more data centers are using this method, but closed loop systems have a catch. Just like.
Kaylee Hunt Your body cools itself, some data centers use an air chiller to cool down that fluid. In that case, a data center’s overall water usage would be pretty small. They only need water for things like landscaping and flushing toilets. But some data center use water chillers to cool that fluid, Cook says in that case a closed loop system can
Margaret Cook So be very water-intensive. Our estimates show that water use could get to half a billion gallons.
Kaylee Hunt Cook says your average data center likely uses about 60 million gallons of water a year, around what an 18-hole golf course uses.
Katie McAfee But the new ones, the hyperscalers that Cook’s talking about that are being built to do AI.
Kaylee Hunt Worst-case scenario, those can drink up more than a billion gallons of water in a year.
Margaret Cook That would have to be a really water-intensive cooling strategy, and that’s not something that’s usually chosen in Texas.
Katie McAfee But even if it was, Cook wouldn’t know. The truth is, the state doesn’t even know. And they’ve tried asking twice. Earlier this year.
Kaylee Hunt Year, the Public Utility Commission sent out a survey asking for details about each data center’s water use. At a recent Texas House committee hearing, State Rep. Mary Gonzalez asked a data center industry representative
Mary Gonzalez How many of your member entities filled out the survey sent out by the state?
Kaylee Hunt Less than a third of the state’s 341 data centers responded. In another survey…
Katie McAfee The state’s water development board ask data centers how much they’re using.
Kaylee Hunt Only 17% of them responded, despite it being required by law.
Brad Buckley Just so I understand, so the response rate that you speak of, is that the same data you’re collecting for state water planning?
Kaylee Hunt But that’s Representative Brad Buckley, a Republican from Bell County. He’s talking to Temple McKinnon. She oversees the state’s water supply planning.
Tommy Minyard It’s the bedrock plan. Okay, so we’re building a state water plan off of the 17 percent response rate. Am I, is that an overstatement? Well, it’s. Yeah, so, we have to do a lot of, whatever you call it, extrapolation. Yes, we do. Yeah. I mean, that is a terrible response rate
Kaylee Hunt Not knowing how much water is being used now makes it harder to plan for Texas’s future water needs. But that’s not the only problem. We also don’t know how much electricity we’ll need to power all of these data centers. And how all of that new demand is going to affect the price of electricity.
Allison Silver Electric prices have already gone up 20% to 25% since 2020. In Texas alone, they’ve gone up 29%.
Kaylee Hunt Allison Silver is a former state and federal energy regulator. Now, there’s lots of things contributing to those higher electricity prices. Aging infrastructure. Supply chain issues.
Kaylee Hunt And more high demand projects like data centers. They need things like more high voltage transmission lines and more power.
Allison Silver Those cost increases within ERCOT for transmission are assigned across every retail customer in Texas. So there is no escaping those.
Katie McAfee Even if there’s no data center being built in your neighborhood, your wallet might still feel it. This is something that worries a lot of people.
Kaylee Hunt Including, at least lately, state officials. Here’s Governor Greg Abbott at a campaign stop last month.
Greg Abbott Any AI data center even thinking about coming here, they got to bring their own money, bring their own power, reuse their own water, and do it in a way that reduces the cost of electricity for residents across our state.
Katie McAfee Developers do sometimes plan to bring their own power generation. Like putting in a natural.
Kaylee Hunt Gas power plant right next door to their data center. But Allison Silverstein says that doesn’t really solve the whole problem.
Allison Silverstein Even if they are building all these energy resources inside the fence of the facility, they are still increasing costs for everybody.
Katie McAfee Silverstein says that data centers are mostly cost indifferent.
Kaylee Hunt Meaning, when there’s steep competition for resources like transformers and gas turbines, things needed for electricity generation, they’ll pay a lot more to get to the front of the line. That means the people selling that stuff can charge more for it. So when your local utility needs to buy a new transformer or gas turbine, they also have to dish out more cash. And this goes beyond infrastructure, to all parts of energy generation.
Katie McAfee From natural gas prices to paying plumbers and electricians.
Kaylee Hunt ERCOT has gotten requests for almost 500 gigawatts of power from the Texas grid. That’s enough electricity to power every home in America.
Brian Korgel All of that is definitely not gonna come online, but the question is, well, how much of it will?
Kaylee Hunt Brian Korgel is the director of UT Austin’s Energy Institute. He says the majority of those requests come from data centers.
Brian Korgel Are we really going to double our grid or will it more be like a 20% increase or something over five years? And even that increase is going to be pretty massive.
Katie McAfee That uncertainty is a huge challenge for ERCOT. They know they need to expand the grid’s capacity to account for these new electricity users, but they don’t know by how much. That’s part of why Governor Abbott ordered a pause on data centers trying to connect to the grid. He wants the state to get a better idea of their water and electricity needs.
Brian Korgel What’s gonna happen is that data centers won’t get built. So the big question is, you know, can Texas keep up with this promise of economic development?
Katie McAfee That’s the question elected officials across the state are asking themselves. Council, are we ready to vote?
Kaylee Hunt It’s been hours since the start of the City Council meeting in San Marcos. After hearing testimony from hundreds of community members, the council is ready to take a vote.
San Marcos Official Okay, the motion passes 5-2 with two council members saying no with Councilmember Mendoza and Gonzalez.
Katie McAfee The council votes to block the data center in Tory Martin’s backyard.
San Marcos Official Hold on a second. Hold on just one second. Let’s get clarity.
Kaylee Hunt It’s 2 a.m. On a Wednesday morning after an eight-hour meeting, and folks won’t stop cheering.
San Marcos Official Which means the zoning item, hold on, y’all. Hold on.
Kaylee Hunt But in the council chambers, some members, even those who voted to block it, see this as a missed opportunity.
Josh Poselk We have like this golden goose egg here though that could have solved a lot of economic stuff.
Kaylee Hunt That’s Councilmember Josh Poselk. He doesn’t think it’s a matter of this data center getting built or not built. He thinks it’s just a matter of where it’ll go. And who gets to benefit?
Josh Poselk I know that there’s other data centers being proposed and come across the way, and man, if we get one that goes right across the street, you know, and we had an opportunity at really a good option for us. I understand all the drawbacks that have been paid out here, so I’m not trying to discredit that, and thank you for your time for bringing that to our attention. But the economic piece of this is very important.
Kaylee Hunt But are data centers really a golden goose egg for a community? How much do they lift up local economies? And how long does that lift?
Katie McAfee What’s last?
Jerry Quijano That’s coming up on this special edition of Austin Signal, the data center next door, that is after this break. Welcome back, this is Austin Signal. I’m Jerry Quijano. Today we’ve got a special hour that we’re calling the data-center next door. It’s a reporting project from KUT’s Kaylee Hunt, Katie McAfee, and Lee Walden. One of the major selling points of bringing a data center to any community has been what it can do for that economy. More tax revenue for local governments, a huge influx of cash for local businesses from the workers brought in to build them. But what can a data center actually do for a local economy? Katie Lee and Kaylee traveled far from Austin to find out to a Texas town where one of the country’s biggest data centers is being built.
Kaylee Hunt We’re headed to Abilene.
Katie McAfee It’s a mid-sized city with rural college town vibes. We’re here to meet Lexi Smith. She and her family live just outside the city.
Lexi Smith Our land we own right here we own that shed and that tank all down there. The family has a lot going on.
Kaylee Hunt They sell fireworks. Lexi is a teacher. Her husband is an accountant. He also co-owns an electrical company. The Smiths happily make extra money and find fun ways to spend it. Her husband has taken up pickleball. He’s number one pickleball player in Adelaide. They even paved a pickleball court at their house. Smith offers to drive us around their property and the neighborhood. Settling into her car, she tells us being out here was the goal.
Lexi Smith This was always the plan was to build by family. Um, and then once we were able to, we designed our house, got the land and this was the forever plan. But now she says the neighborhood has changed. I can mark things by fireworks season, um, two or three fireworks seasons ago, right before everything started.
Kaylee Hunt It was completely normal two years ago construction started on the property across the street from the Smiths Bulldozers excavators eat through the landscape Shoveling large piles of red dirt the site looks like a huge sandbox a haze of dust and construction noise Wafts towards the Smith’s property Lexi says the construction has made traffic worse that their home value has tanked that their view Which used to be rolling hills covered in trees and farmland has been completely transformed Whib!
Lexi Smith No night sky anymore. We used to go, my sons, we would like to lay on the pickleball court and like look up and see. No, that’s gone. There’s no stars. There are like three stars.
Katie McAfee Blotting out the stars for Lexi Smith and her boys? A giant data center complex called Stargate. This is the Project Stargate. The new half a trillion dollar Stargate data center.
Lexi Smith Stargate. So put that name down in your books, because I think you’re going to hear a lot about it.
Kaylee Hunt The project was pitched to Abilene by some of the biggest names in artificial intelligence, Oracle and OpenAI. It’s set to be one of the most important AI facilities in the world. It’ll create thousands of jobs, and Abiline, as the flagship city of the project, will see the biggest economic returns. But first this would have to give them a big tax break.
Lexi Smith Thank you, Mayor and Council. Before you now as an amended and restated tax abatement agreement with Lancia.
Kaylee Hunt Abilene City Council voted on the deal in June 2024. They offered Stargate an 85% tax break for 10 years. It passed unanimously.
Abilene Official Motion carries and this City Council meeting, Abilene, Texas is adjourned.
Kaylee Hunt The council had a straightforward argument for the deal. They’d get millions in property tax revenue, even with the tax break. Plus more sales tax from the thousands of people moving to Abilene to build the data centers. The newcomers would stimulate Abiline’s economy. It’s been over a year and a half since they made the deal, and leaders in Abilane say it’s already paying off. One of my favorite ways to describe Abilen is we’re mid-sized and mighty. This is Misty Mayo with the group Develop Abilin, the local economic development corporation. This is from a promotional video she did with the mayor, pitching the tax benefits of the data center. It will mean future prosperity for everyone.
Katie McAfee She says the money will help improve infrastructure in Abilene, it’ll help local businesses, it’ll even help out the school system.
Leah Walden You have students now that have new equipment, students that are going to be able to be educated in new facilities. But will they?
Jordan Ziemer I wish it was based in reality, but that unfortunately is not true.
Kaylee Hunt That’s Jordan Ziemer with Abilene ISD. He says he’s fielded a lot of questions recently about whether Stargate will improve the public school system.
Jordan Ziemer The truth is higher taxable property values caused by Stargate or not do not equal new revenue for Abilene ISD.
Katie McAfee Zeemer says any new revenue the district gets will likely be sent back to the state under Texas’s Robin Hood rule. We asked for interviews with Missy Mayo and the mayor of Abbott.
Kaylee Hunt Neither made themselves available.
Katie McAfee But we did talk about this in the last video.
Kaylee Hunt To Julia Robin from Oracle, one of the companies behind Stargate. She says beyond the tax revenue the project is already having a big economic effect on Adelene.
Arlene Castleman We see catering businesses, we see local restaurants, we see gas stations, we see hotels booked at capacity.
Kaylee Hunt So we headed out to downtown Abilene to talk to folks there. Do they think Stargate is driving up business? Yeah, I would say no.
Katie McAfee That’s Arlene Castleman. She owns seven-in-one books. Her store is actually briefly featured in Misty Mayo’s promotional video. Castleman says…
Kaylee Hunt Downtown Abilene has gotten busier in the past decade, but she doesn’t think data centers have anything to do with it.
Arlene Castleman I think development downtown started a long time ago. There were a couple of restaurants that first decided to be brave and open down here. And once they were there, boutiques started opening and that was a long time before the data centers.
Kaylee Hunt We walk down Abilene’s main drag. The whole downtown is a few blocks of red brick buildings. It’s midday on a Tuesday, it’s hot, there’s not that many people out. We see a big paramount marquee hanging above the local theater.
Katie McAfee Hey, I’m a reporter for K…
Kaylee Hunt We asked an employee in the lobby if they’ve seen sales go up since the data center came to town. There’s definitely more going on down here in this general area. I don’t know if that’s necessarily translated into an uptick in numbers.
Kaylee Hunt Across the street, the people working at Bogey’s Deli say the same thing.
Kaylee Hunt As far as what we’ve seen, we have had a few individuals in from the data centers, but it hasn’t been a huge impact for us.
Katie McAfee But around the block, a brewery called Grain Theory has seen a sizable jump in business. Bartender Regan VanderWeele says she gets nosy when new people walk in. I’ve definitely seen a… a pretty big intake of customers in coming from out of town then also because of the data center specifically.
Kaylee Hunt So, some places are seeing growth because of Stargate. Others can’t say for sure. If you look at the sales tax collections, they’re up 30 percent from 2024 to 2025. But even if the influx of employees coming to Avaline.
Leah Walden We’re giving local businesses a boost, it’s also causing some problems. If Elon Musk steps on the city bus, the GDP of that city bus goes up. It doesn’t change anybody’s life on that city bus, it’s still a city bus. This is Diana Luna.
Kaylee Hunt She’s a local political organizer running to represent Abilene in the Texas House. We met her at a coffee shop downtown.
Leah Walden That is essentially what’s happened here. Yes, the GDP in Abilene has gone up because a billion dollar corporation moved in at Abilane. But they haven’t done anything for the citizens of Abil-
Katie McAfee Luna told us she’s especially worried about a growing housing crisis in Abilene. More and more workers are coming to the area to help build the Stargate facility.
Leah Walden We have three universities and one large Air Force base here. So this exacerbating what’s already a housing shortage in this area.
Kaylee Hunt Luna says this shortage has made rent go up a lot. The average rent in Abilene is almost $2,600 a month, according to Zillow.
Katie McAfee That’s up nearly 50% since last year. It’s cheaper on average to rent in Austin right now than it is in Abilene. That’s left lots of folks suddenly struggling to make rent. Steve Rogers is one of those people. Rogers says he uses an alias out of fear of losing his job for speaking out against Stargate. There’s a reason why he chose that name.
Steve RogersYeah, because I think this is what Captain America will be doing, you know?
Kaylee Hunt Rogers works in energy construction. He says he’s making the most money he’s ever made, but he’s still struggling to pay the bills.
Steve RogersWe don’t have anything left for savings. I’m in school and I work full time.
Katie McAfee Roger says the whole thing has put renters like him on edge.
Steve RogersWe’ve taken a fix and a lot of stuff ourselves. I’ve already had one landlord not renew on me to turn it into a $7,000 a month Airbnb.
Kaylee Hunt Other people simply can’t afford a place in Abilene at all. Luna says the city is seeing a surge in people experiencing homelessness.
Michael Prado These are the family ones, they have two rooms.
Katie McAfee This is Michael Prado, but people call him Big Mike. He’s giving us a tour of Hope Haven, one of the city’s homeless shelters. It’s got about a dozen apartments. They each have a window, a twin-sized bed, a few communal shelves for everyone’s stuff.
Michael Prado That we’ve got in more families. I never had kids in here. It’s been a long time. I had to ask for car seats, transport. I ain’t had this many kids ever.
Kaylee Hunt Big Mike says more and more families have been reaching out in need of a safe place to stay. Some had been priced out of their homes.
Katie McAfee Others have been evicted. Big Mike says the city’s high rent prices have also made it harder to move these families back into permanent housing. He says it used to take…
Kaylee Hunt Just over a month to find someone at the shelter or permanent housing. Now it can take up to six months. And it’s not just families who are struggling.
Michael Prado And getting a lot of calls of data center workers like looking for somewhere to stay. Now, or the ones that get fired. A handful of calls, I came out here, I was working at the data center and I got fired and now I’m stuck.
Katie McAfee Big Mike doesn’t blame city officials for the housing crisis like other residents do, and he’s not even sure it’s the data center’s fault, but it’s starting to take an emotional toll.
Michael Prado Do I hate the data center? No, I’m not a hater. I hate that we’re getting the calls, that people are getting evicted. I hate at least signing, they can’t afford the 2,600 hike on their rent. I hate when single moms are calling. I hate two single moms and their kids are reaching out crying. Like, what am I gonna do? That’s what I don’t like.
Kaylee Hunt Julia Robin from Oracle says the company is acutely aware of the housing crisis unfolding in Abilene. She says Oracle has a team finding housing for people who work at Stargate. But she also says this is at least partly inevitable.
Arlene Castleman So I think there is some just like natural dynamics that occur with economic development in a particular area that is a byproduct of other benefits that are seen.
Katie McAfee The city of Abilene was sold on what Stargate-
Kaylee Hunt could do for them. They haven’t seen the full economic potential of the data center yet. Stargate is still being built, and the city could see millions more when it’s finished.
Kaylee Hunt4 You can’t spell Abilene without AI What once was yours is now date of mind I can’t move back with the rent so high No you can’t spell Abileen without AI
Jerry Quijano This is Austin Signal, I’m Jerry Kikano. We’re spending this hour talking about data centers. Communities across Texas and people of all political persuasions have tried to stop data centers from being built near them. But in many cases, local officials have very little power to do anything about it. Lee, Kaylee, and Katie took a look at the laws and regulations that have helped make Texas a focal point for data center development.
Kaylee Hunt In February, Hays County Judge Ruben Becerra proposed a moratorium on data centers. The moratorium would send a clear message. Hays county is not open for business for data center developers. But the moratorium didn’t pass.
Walt SmithWe don’t have planning and zoning authority, and if we had the planning and zoning authority I’m sure that this court would vote against having another data center here.
Kaylee Hunt But that’s Hays County Commissioner Walt Smith. He’s worried about the water supply in Hays county. But he was seriously against the ban. Because…
Walt SmithIf we pass this as written, we’re gonna get sued and we’re going to lose.
Katie McAfee That’s exactly what happened in Hill County, north of Waco. In May, commissioners there passed a moratorium on data centers, and just days later, a Hill County judge and two Hill County commissioners are being sued by a data center developer.
Kaylee Hunt Million dollar lawsuit after the county put a pause on the data center development. Hill County Commissioners rescinded their moratorium after the lawsuit was filed. And no other county in Texas has passed their own moratorium since. There’s two state laws that make it hard for local governments to ban data centers. One makes it way harder for cities to freeze or ban specific kinds of property development. It’s how local bans on fracking around the state have been overturned. And then there’s one known affectionately as the Death Star Bill. This law, passed in 2023, stops city and county governments in Texas from making any laws that conflict with, or go further than, state law on eight topics. The topics include business and finance and natural resources. So like, epically broad topics. Basically, the law says all regulation in these areas is strictly within the purview of the state.
Amanda Rodriguez It was simply the all encompassing nature of this bill, the threat alone being enough to stoke such significant fear in municipalities to not even try to dare to act to go against anything that the state is doing.
Kaylee Hunt That’s Amanda Rodriguez. She’s a city counselor in San Marcos. She’s been trying to stop data center development for years.
Amanda Rodriguez We are no longer and have not been for quite a while the state of local control, quite the opposite. It is a top-down approach that disallows us completely as governing members to listen to the needs and meet the needs of our people.
Katie McAfee Rodriguez says that state law is stopping local governments from passing ordinances that speak to the needs of people in local areas. Especially in rural areas.
Amanda Rodriguez More than half of these facilities that are coming here are set to be here are in county.
Kaylee Hunt Datacenters need wide open spaces and developers are often finding those spaces next door to ranchers, farmers and.
Katie McAfee Rural communities throughout the state. And many of these people have been calling on state lawmakers to do, well, something.
Jim Henson I think they are asking some of the same questions you are and they don’t have the answers yet.
Kaylee Hunt This is Jim Henson. He’s the director of the Texas Politics Project. He says it’s not surprising that lawmakers aren’t taking a stance on the issue.
Katie McAfee Henson says lawmakers are looking to the governor for how to position themselves on the issue. But Governor Abbott hasn’t made it easy.
Greg Abbott Well, thank you, Sundar, for being here. Thank you for the huge announcement. So an announcement.
Kaylee Hunt Last November, Abbott sat beside the CEO.
Katie McAfee Of Google to announce a big deal they had made. A $40 billion investment in three new AI data centers in Texas. Abbott said once the projects are completed…
Kaylee Hunt Google will have a larger data center footprint in Texas than anywhere else in the world.
Greg Abbott Texas will be the centerpiece for AI data centers for Google and the entire world.
Kaylee Hunt It wasn’t a surprising announcement at the time, but now people are looking back on it differently. Because this summer Abbott made a hard pivot. Now he says he’s.
Greg Abbott Pushing back against these AI data centers that are trying to build in our neighborhood.
Katie McAfee At a campaign stop in a tiny town near Dallas, place called Bullard, Abbott set some new ground rules for data centers.
Greg Abbott Any AI data center even thinking about coming here, they got to bring their own money, bring their own power, reuse their own water, and do it in a way that reduces the cost of electricity for residents across our state.
Kaylee Hunt Since then, Abbott has doubled down. This month, he told state regulators to audit all data center projects under consideration right now. What tax deals they’ve made, their power plans and anticipated water use, and how they plan to, quote, reduce impacts to neighboring communities. If they don’t comply, they don’t get to connect to the state’s sweet, sweet power grid. In an email, Abbot’s press secretary said many data center companies have already agreed to follow the new rules. The major players, like Microsoft, Amazon, Google, have put out their own statements saying they’re happy to comply with the audit. Regulators say they need several more months to review the latest wave.
Katie McAfee Of data center proposals. But not everyone is convinced Abbott’s new directives will mean anything after election day.
Sid Miller This is all campaign fluff on Abbott’s part, nothing more.
Kaylee Hunt That’s Texas Agriculture Commissioner, Sid Miller, a Republican. Unlike other state leaders, Miller has no dog in this fight. He lost his primary election in March and is writing out his term until the end of the year. He says if Abbott was actually…
Katie McAfee Serious about regulating data centers.
Sid Miller He would call the moratorium. If he was, he’d call a special session. If he wasn’t, he would return the campaign donations. He’s done none of those three.
Kaylee Hunt Abbott has taken at least $2 million from companies or individuals with connections to data centers in the state. That’s according to an analysis by the Houston Chronicle. Democrats have also been pushing Abbott to call a special session of the legislature to pass new rules on data centers.
Katie McAfee But Jim Henson from the Texas Politics Project says that’s just not going to happen.
Jim Henson The likelihood of Governor Abbott calling a special session with the general election two months away on an issue that is giving Republicans problems is just vanishingly close to zero.
Jerry Quijano Polling suggests a majority of Texans are opposed to a data center being built in their community. The opposition cuts across racial and ideological lines. It’s especially strong in rural and suburban areas. And the reasons for this data center skepticism are all over the place. So for the final story this hour, Katie, Kaylee, and Lee asked, is there anything data center developers can do to fix their PR problem?
Katie McAfee Everywhere you look, people are talking about data centers.
Tori MartinI live near a data center and this is the kind of water that I get out of my taps.
Kaylee Hunt On social media, people talk about how they’ll affect our water.
Katie McAfee This is what our first drinking water is going to look like in a couple years, all because of big AI companies like Chachi Beauty.
Kaylee Hunt What they’ll do to the state’s farmland and
Katie McAfee LIFESTAR.
Kaylee Hunt9 You know it’s getting bad when a farmer said he hasn’t seen a single bee nearby since a data center was built.
Katie McAfee What Texas leaders will do to stop them.
Kaylee Hunt We have literally zero regulation right now at the state level, which And they’re concerned about where data centers are popping up. I don’t want to live next to a data center. You don’t wanna live next your data center Now, people will say a lot of things on the internet, but even in real life, there’s angst about data centers.
Jerry Quijano All that power and all that water is definitely a huge concern.
Kaylee Hunt How AI is shaping people’s lives. I have seen the trend of using AI as your therapist. And what it might mean for computers to know more and more about us.
Katie McAfee I feel like if there’s more, there could be less security, maybe, and then like people are stealing all our information. No, I don’t know if that’s even true. I might just be pulling that out of my butt. The backlash over data.
Kaylee Hunt Has people coming up with some interesting solutions.
Lexi Smith We want your pee to cool these data centers. Catchy, too. We want you pee. Please give us your pee. Let’s pee on computers together.
Kaylee Hunt And some pretty extreme solutions.
Sid Miller Data center fire cannot be put out. So since we’re all on the same page, you wanna get rid of them, send them on fire.
Kaylee Hunt But do we really need to go this far?
Dan Stanzione There are real concerns about them, but there’s other things that people are complaining about that I think are perhaps not as big a deal, or there’s some misinformation involved.
Katie McAfee Dan Stanzione is the director of the Texas Advanced Computing Center, or TAC. It’s the data center at UT’s Pickle Research.
Kaylee Hunt Campus we went to earlier in the series. Stan Cione says data centers can use a lot of water. Many older data centers do, especially crypto mining facilities that were built quickly over the past decade. It’s cheaper in Texas to use millions of gallons of water to cool a data center than it is to use a closed-loop system that uses lots of power.
Dan Stanzione If you let people be bad actors, they probably will be, but a little bit of regulation would go a long way on this short of a sort of outright ban.
Katie McAfee But Stanzione says the water problem is an easy fix, because we already have the technology to run data centers with less water. Like at Stanzion’s data center, the TAC. Remember, it’s loud and. Stan Zion says many of the servers here are cooled using water from a million-gallon storage tank they filled up in 2012.
Dan Stanzione It’s 2026, it’s the same million gallons that’s still circulating there, right? We don’t actually consume any of it. It just flows around and around in a loop, getting chilled over and over again.
Kaylee Hunt And Stanzione says you can even cool a data center with no water at all. Tac cools some of its servers using a method called direct liquid cooling. It sounds fancy, but really, they just…
Dan Stanzione Take the whole server, dump it in mineral oil, cool it that way.
Kaylee Hunt The state could force data centers to use these kinds of technologies. But right now, who knows what lawmakers will do when they meet next year. In the meantime, some companies at least seem to be trying.
Ben TownsendMy name is Ben Townsend and I’m the Global Head of Infrastructure Strategy and Sustainability at Google.
Kaylee Hunt Townsend told lawmakers at a Texas House committee hearing this summer about Google’s efforts to limit water use at its data centers.
Ben TownsendWe do not believe that water should be a black box topic. Communities deserve to know how much water data centers use, and water planners need to know how much data centers water use.
Kaylee Hunt The majority of data centers operating in Texas have not shared that information. But asking for that information is something that communities could do. In fact, they could be asking for more than just information.
Katie McAfee Townsend says that Google and other data center developers have money to spend.
Ben Townsend They have room in their budgets to also help fund public water infrastructure and positive water outcomes for communities. If you want to develop in my backyard, I’m excited to have a discussion. But I really need these water solutions fixed.
Kaylee Hunt Thompson said all of Google’s new data centers in Texas will be cooled with air instead of water. But…
Katie McAfee There’s a hitch. Saving on water means using more electricity. Water cooling is just way more energy efficient than cooling with air.
Kaylee Hunt And data centers already need a lot of energy. A single hyperscale data center can require two and a half gigawatts. That’s about the average energy consumption of the entire city of Austin.
Michael Weber You might have one Austin’s worth of power at one data center facility at one remote location. And so the power density blows away by orders of magnitude what historical data centers had.
Katie McAfee This is Michael Weber. He’s an engineering professor at UT Austin. He says a lot of things are required.
Kaylee Hunt Requiring more electricity these days. Electric vehicles, people trading out old gas appliances for electric ones like stovetops and heating. But that’s easier to rally support behind, because it’s offsetting other kinds of energy. Gas for your car, natural gas for your stove.
Michael Weber With data centers, it’s additive, it is new demand.
Katie McAfee Together, all the data centers looking to build in Texas want 200 gigawatts of power.
Kaylee Hunt That’s more than twice as much power as Texas uses right now. And they want that to happen in the next five years.
Michael Weber Most people who follow this closely don’t believe that number.
Katie McAfee Weber says a lot of things are slowing that growth down, like delays in raw materials for gas turbines and electrical transformers. But even if you don’t believe the big numbers…
Michael Weber Even the small numbers are pretty big.
Katie McAfee Like 40 to 50.
Kaylee Hunt Gigawatts. If you’re keeping track, that’s about 15 Austin’s worth of power.
Katie McAfee Weber thinks that developers are going to throw a bunch of money at the grid to start generating new power as fast as possible. So that means more oil drilling.
Kaylee Hunt More natural gas production, more solar panels, more wind turbines, more transmission lines, and more… Well, you get the picture. Weber isn’t worried about the power or water situation because he says those issues are more solvable. He’s worried about things like pollution, noise, tearing down old growth forests and interrupting wildlife. But he says there’s hope.
Michael Weber If we install a lot of data centers and they are efficient and they use closed loop dry cooling, they will not hurt our grid or our water resources, in fact, might enhance our grid. That’s the goal. Let’s get the rich companies to pay to upgrade the grid.
Kaylee Hunt Just like the guy from Google, Weber says that communities need to negotiate. Tell data center developers what they want out of the deal. But negotiations take time.
Katie McAfee You can’t make a deal with someone who won’t shake your hand.
Kaylee Hunt And sticky with heat and humidity outside. At Sacred Heart Church in Bastrop County, rows and rows of tables are filled with residents gathered in opposition to a proposed data center.
Katie McAfee4 What’s really happening is definitely dishonest. These big industries, they always choose the areas that the people of color and people of low income are living in, because they’re not going to get the pushback they think. This is not good neighborly behavior.
Katie McAfee The proposal from Pacifico Energy is for a natural gas power.
Kaylee Hunt Plant. It would eventually power a new hyperscale data center on the same site. The facility is reportedly linked to Anthropic, one of the biggest AI firms in the world. But the developers are trying to do things the right way. They’ve withdrawn the request for tax incentives. They’re not planning to use too much water. They are bringing their own power. But people here don’t really care.
Allison Silverstein Their pollution is invasive. It’s land pollution, it’s air pollution, it’s water pollution, it’s…
You go to the bathroom. Noise pollution.
Allison Silverstein They need to just go away.
Kaylee Hunt Outside the meeting, Kelly Jeske and Marie Blaisick are huddled together talking.
Katie McAfee Quickly. They look like the kind of older women who might host a rager of a craft club or have some butterscotch candies in their purses. What if you ask them?
They’re rabble-rousers. They have taken advantage of our citizenry. That’s what disturbs me the most. We are being victimized by these guys and that really bothers me.
Kaylee Hunt There’s not just one issue that has them fired up about the data center.
All of it, you know, water, my God. And of course, yeah, the air pollution and then the water and then electric bills and then just the noise and destruction of our environment, beautiful.
Kaylee Hunt And very little in return. Jeske and Blazek say they’re not usually the type of people that come to town halls.
Katie McAfee They say they’ve been activated by the coming data centers.
I never spoke in front of anybody and I did in front of the county commissioners meeting and I may do it again.
Kaylee Hunt All over the state, data centers have awoken something in people across party lines.
Lexi Smith There’s no amount of money worth it.
No to AI data centers. Protect our water resources.
Lexi Smith Data center.
Katie McAfee And AI are not worth fighting for. From what we’ve seen in town after town, it almost doesn’t matter what a developer says or does. People don’t believe the promises. They’ve already made up their mind. We don’t want it.
We don’t want it in our backyard. Y’all can put it anywhere else, but not in our back yard. Because I’m pretty sure y’all don’t want it your backyard.
Kaylee Hunt For some people, this isn’t even about the data centers. Or about the power. Or even the water. People are worried about humanity. The trade-offs they’re making to facilitate artificial intelligence. What AI might take from them. And what, if anything, they get in return for the profits of trillion-dollar corporations. For them, opposing a data center is the only way of taking back control.
Jerry Quijano That was KUT’s Katie McAfee, Kaylee Hunt, and Lee Walden. You’ve been listening to a special hour of Austin Signal, a project we call The Data Center Next Door. You can read all of their reporting at kut.org slash data centers. I’m Jerry Quijano. Thank you for tuning in.
This transcript was transcribed by AI, and lightly edited by a human. Accuracy may vary. This text may be revised in the future.
