Hyperscalers Flock to West Texas for Abundant Power and Labor

Galaxy Digital's Vice President of Data Center Capital Markets, Simrit Dhinsa, attributes the influx of hyperscalers to West Texas to the region's abundant power, transmission infrastructure, and available labor. Companies like Google (GOOG), Microsoft (MSFT), and Meta (META) are drawn to West Texas for its ease in building big AI campuses.

Dhinsa notes that it's often easier to build large AI data centers in West Texas than to establish power infrastructure in metropolitan areas, which face grid constraints. This shift is exemplified by Galaxy Digital's Helios site, where the company has repurposed its Bitcoin mining infrastructure for AI needs.

The first 200 MW of an 800 MW deal has been delivered to CoreWeave under a 15-year lease as part of this transition. Galaxy Digital has secured ERCOT approval for up to 1.6 GW at Helios, which will aid in meeting Texas's growing demand for data center capacity.