4 February 20–26, 2025 dallasobserver.com DALLAS OBSERVER Classified | MusiC | dish | Culture | unfair Park | Contents everal weeks into his second presi- dency, Donald Trump stood before reporters in the White House, flanked by his Tech Bro cronies, and announced the Stargate initia- tive — a response, he said, to China’s ad- vancements in artificial intelligence. The announcement signaled the start of a rather lame 21st century arms race. Instead of who can make it to the moon first or build the bigger, deadlier bomb, this competition is nebulous even to those who consider themselves ex- perts in the field. Whose AI can be faster, whose can be built cheaper, and what exactly — laypersons and tech geniuses both want to know — will the implications of widespread AI actually be? The Stargate venture is funded by leading artificial intelligence compa- nies OpenAI, SoftBank and Oracle, and is expected to drop $500 billion into the United States’ AI infrastruc- ture over the next four years. $100 billion of that funding has already been deployed, and much of it is be- ing funneled into the Lone Star State, where the data center industry, a crucial piece of the needed AI infra- structure, has become king. “It’s a very clear indication that the Trump administration sees the value of this type of technology, of AI, and what it can do and the transforma- tional qualities of it,” Mel Morris, CEO of the artificial intelligence re- search group Corpora.ai, told the Ob- server. “$500 billion is a large sum of money, no question mark about that.” Less than a month after Trump announced Stargate, France launched its own €110 billion AI in- vestment in a direct response, Presi- dent Emmanuel Macron said, to the U.S. effort. The race is on, and Texas is set as ground zero. The flagship Stargate campus is already under construction in Abilene. The data center is the size of New York City’s Central Park, and Bloomberg reports it could eventu- ally run on 1.2 gigawatts of power all day, every day. That’s enough energy to power around 240,000 homes, ac- cording to data from the Electric Re- liability Council of Texas (ERCOT). Ten other centers are under de- velopment in Texas, and as many as 10 more could be on the way, Ope- nAI officials have said. More specific locations could be announced in the coming weeks. Once Texas’ Stargate strong- hold is secured, the venture may begin building in other states, OpenAI’s chief global affairs officer, Chris Lehane, recently said on a call with reporters. Sixteen have expressed interest. For the immediate future, Stargate is Texas’ boon and Texas’ problem. Already we might be falling behind. “We can’t [meet the projected energy de- mand caused by data centers], not with our current grid, but it doesn’t mean we can’t handle it eventually,” state Sen. Nathan Johnson said. “The question is can the con- struction of this additional, massive electri- cal load be carried out at the same pace as we build out our grid to be able to accommo- date it? And can it be done in a fashion that doesn’t compromise the rest of what we rely upon?” The Wild West of Data Centers ou probably drive past a handful of data centers a day without knowing they’re there. They are sometimes in- teresting looking — like the glass and white- iron Equinix Infomart building off North Stemmons Freeway, which is rated as one of the most digitally connected data centers in the country. The vast majority, though, just look like unassuming warehouses. Interesting look- ing or not, the centers are almost always massive. Data centers house rows and rows and floors and floors of servers and computing equipment that, in the case of AI-focused centers like Stargate’s, can train machine learning algorithms and handle the general demands that a model, such as ChatGPT, re- quires to run. The centers are also stocked with massive fans and cooling units that keep the equipment from overheating. They are energy intensive and run 24/7 — a strain that has become worrisome for some state leaders in light of Texas’ domi- nance in securing the developments. Ac- cording to a 2024 report from the state comptroller, Texas is home to 279 data cen- ters, with 141 landing in Dallas or its sur- rounding suburbs. Data centers in the Dallas area used the second most power in the country last year, at 591 MW. Luke Metzger, executive director of the Environment Texas Research & Pol- icy Center, said Texas has been an appealing landing spot for data cen- ters because of cheap land, cheap en- ergy and generous state incentives like the Chapter 312 program, which allows local governments to give massive tax exemptions to develop- ers for 10-year periods. In a forecast presented to the state Senate Committee on Business and Commerce, ERCOT CEO Pablo Vegas told legislators that forecasts show Texas’ energy demand dou- bling in the next five or six years. The booming AI and cryptocurrency data center industry accounts for over half of that increase, while antici- pated population growth and in- creasingly extreme weather events also factor in. The latest worst-case scenario figures — which Vegas presented to the Texas Public Utility Commission in February — paint an even more dire picture. ERCOT said Texas could begin coming up short on power as soon as 2027. There is an 8.3% supply shortfall predicted for peak demand periods, and that shortage grows to 32.4% by the sum- mer of 2029. “I don’t know of a precedent that sees such a dramatic growth in such a short period of time. Basically since World War II, our demand for elec- tricity has risen quite slowly, maybe a few percentage points a year, and now we’re talking about doubling the demand in just a five or six year period,” Metzger said. “There’s, I think, real risks then for grid reli- ability.” Metzger was relieved to see ER- COT’s announcement cause a stir amongst politicians, although, he admits, that seems to have died down in recent months as other is- sues have taken priority during the legislative session. If ERCOT’s prediction from last summer of six years of grid reliabil- ity holds true, state legislators have at most three legislative sessions to come up with a plan to reinforce the state’s electric grid. “Texans will ultimately pay the price,” Lt. Gov. Dan Patrick warned on X shortly after ERCOT issued the dire energy demand fore- cast. “We want data centers, but it can’t be the Wild Wild West of data centers and crypto miners crashing our grid and turning the lights off.” With solid political backing, data centers are flocking to Texas, where the electricity and water to run them are running short. Illustration by Alex Nabaum | UNFAIR PARK | >> p6
