Stargate and the New Era of AI Data Center Strategy: Lessons from Abilene and Beyond

With the September 2025 announcement of five new Stargate data center sites, the OpenAI-Oracle-SoftBank consortium has officially launched one of the most ambitious digital infrastructure initiatives in U.S. history. These new hyperscale campuses represent a new paradigm—not just in scale, but in how and where modern data centers are being built. 

The flagship Stargate site in Abilene, Texas, has already shown that second- and third-tier metros can anchor multibillion-dollar AI infrastructure, provided they meet one key requirement: power. The other major hyperscalers, including Google, Meta, Microsoft, and Amazon, are all replicating this approach toward campuses at or exceeding 1 gigawatt of power. 

For site selection professionals and economic development leaders alike, the implications are profound. These sites are more than data centers—they’re regional economic engines, and they reflect a shifting playbook in how the next generation of compute infrastructure is evaluated, negotiated, and executed.

A Technical and Strategic Overview of the Stargate Flagship in Abilene, Texas

The Abilene Stargate campus will eventually comprise eight H-shaped buildings, designed to house tens of thousands of high-density Nvidia GB200 GPU racks. When fully operational, the site is expected to draw over 900 MW of power, requiring not only grid connectivity but also a dedicated on-site, gas-fired power plant. To manage environmental impacts, the facility uses a closed-loop, low-water cooling system. Water draw is expected to be minimal—roughly 12,000 gallons per year per building after the initial fill.

Economic Impact

The site is projected to generate over $1 billion in local economic benefit over the next 20 years, with ~1,700 long-term jobs and thousands more in construction. Support from Texas political leadership—including a site tour by Sen. Ted Cruz—highlights how AI data centers are now viewed as strategic economic infrastructure.

Site Selection Group Insight

The Abilene project shows the importance of integrating on-site natural gas generation, defined as Behind-the-Meter power (BTM), into site feasibility. At this scale, grid power alone is insufficient. Real estate, water, and fiber are important—but power is the true bottleneck.

The Five New Stargate Sites: A Geographic and Strategic Shift

Announced Locations:

• Shackelford County, Texas – Oracle-led
• Doña Ana County, New Mexico – Oracle-led
• Unnamed Midwest Site – Oracle-led
• Lordstown, Ohio – SoftBank-led
• Milam County, Texas – SoftBank-led in partnership with SB Energy

These new sites bring the total announced capacity to approximately 7 GW of power, on the way to a stated goal of 10 GW and $500 billion in investment.

Key Trends:

• Power as the Primary Constraint: All sites are chosen primarily based on large-scale power availability, cost, and ability to scale.
• Secondary/Tertiary Metro Focus: None of the sites are in major tech hubs. Instead, the strategy favors rural or smaller metros with abundant land, lower costs, and fewer regulatory barriers.
• Grid Readiness and Local Incentives: While exact incentive packages haven’t been disclosed, these deals certainly include property tax abatements, infrastructure grants, and utility support.

Selection Process

It is reported that over 300 proposals from more than 30 states were reviewed, demonstrating a rigorous, multifactor selection process.

Site Selection Insights from Stargate

Site Selection Group views the Stargate rollout as a benchmark for the future of hyperscale site selection. Key learnings include:

1. Power First, Everything Else Second

• Prioritize sites with scalable, cost-efficient, and resilient electricity access
• Grid power remains the “gold standard” due to its reliability
• On-site natural gas generation to be considered early in the process, so long as some level of grid power is available in the future
• Grid modeling and utility coordination are critical pre-development steps

2. Water-Efficient Cooling is the New Normal

• Sites must minimize environmental impact, especially in drought-prone areas
• Closed-loop or dry cooling systems should be a default evaluation criterion

3. Flexible Phasing and Modular Design

• Megacampuses must allow for phased rollouts to align with AI compute demand
• Infrastructure (power, fiber, cooling) must be designed to scale in tranches

4. Incentive Structuring Beyond Property Taxes

• Utility rebates, infrastructure grants, and power cost concessions matter
• Successful sites will involve multilevel public-private coordination

Site Selection Group’s Role in the Evolving Data Center Landscape

As site selection grows more complex, Site Selection Group provides a unique value proposition:

• Advanced Power Modeling: Assessing long-term grid viability and energy price exposure
• Strategic Partnerships: Aligning with utilities, developers, and local government
• Economic Incentive Engineering: Going beyond basic abatements to build complete government economic incentive stacks
• Geopolitical and Regulatory Risk Assessment: Evaluating permitting timelines and social license to operate

Stargate validates the need for multidimensional site evaluation. It's no longer about "shovel-ready" land. It’s about long-term operational feasibility, infrastructure cost control, and scalable energy planning.

Conclusion: A New Playbook for Hyperscale Infrastructure

The Stargate initiative represents a paradigm shift in where and how data centers are built. With Abilene as the blueprint and five new projects on the way, the trend is clear: Power availability is the new gold standard for hyperscale site selection. For economic developers, utilities and infrastructure investors, this shift opens vast new opportunities—especially in underleveraged metro areas.

For Site Selection Group, this evolution underscores our approach: combining technical rigor with economic insight to guide clients toward high-impact, high-feasibility sites. As AI continues to drive infrastructure demand, the winners will be those who can deliver power-first, future-ready locations at hyperscale speed.