What to know:
- Galaxy Digital acquired nearly 500 acres in McGregor, Texas, to build its second AI and high-performance computing (HPC) data center campus.
- The privately funded project will launch with 74 MW by 2028 and has plans to expand into a multi-hundred-megawatt campus by 2030.
- The company expects the development to generate at least $130 million in local tax revenue while avoiding infrastructure costs for residents.
Galaxy Digital will be increasing its AI capabilities with the acquisition of almost 500 acres in McGregor, Texas, where it will develop its second campus for AI and HPC data centers in the state. The latest acquisition comes after the creation of the company’s Helios data center in West Texas, as it continues its efforts to diversify beyond bitcoin mining.
This project will be undertaken with assistance from the City of McGregor, among others. As per the company, the construction work will commence with the construction of a 74 MW capacity, which should be operational by 2028. The campus may develop into a multi-hundred-megawatt site by 2030.
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Galaxy Digital Plans Privately Funded AI Campus
Galaxy Digital said that the whole project will be entirely privately financed, including the building of a substation. The reason for such an initiative, according to the company, lies in the need to avoid having the cost of the required infrastructure put on the shoulders of local electric consumers.
Galaxy Digital plans to bring significant economic benefits to McGregor through this project. The company believes that the campus will increase the city’s tax revenue by at least $130 million.
Mike Novogratz, the head of Galaxy Digital, commented that the company had already demonstrated the value of privately owned data centers using the Helios project in the past years.
“Over the last few years, we’ve proven in Dickens County that a privately-funded data center can be a true, long-term partner for a rural community,” he said. According to him, the construction of a new campus in McGregor is the next step of the company’s roadmap.
AI Demand Drives More Data Center Expansion
This development occurs at a time when the need for computing power in AI is growing in the United States. Many companies engaged in mining bitcoin have started to redirect some of their activities into providing AI and HPC services along with increasing capacity.
The conversion of the Helios campus for the same purpose was initiated by Galaxy Digital after purchasing it in 2022. So far, ERCOT has approved the expansion of Helios to 1.63 GW, which has been leased to CoreWeave for 15 years.
Galaxy was reported to be raising $3.5 billion through a junk bond issuance for the second phase of Helios and to help meet the increasing demands of CoreWeave.
According to Novogratz, the increase in demand for computing infrastructure is a long-term opportunity rather than a temporary one, and the company plans on building projects that are community-friendly.
Competition in AI Infrastructure Continues to Grow
However, Galaxy is not the sole corporation making moves in this regard. It has been reported that on the very same day, Core Scientific announced that AMD will be getting over 500 MW of computing power from 2027, which could rise up to 2.5 GW.
In another development, it has been revealed that Nvidia will be leasing up to $50 billion worth of facilities at the 1 GW Beacon Point campus by Hut 8 in Texas.
Galaxy Digital Shares Fall Alongside Crypto Mining Stocks
Though there were talks of growth, Galaxy Digital stock fell by more than 9% to $20.63 during the day’s trade. Other crypto miners experienced declines, with IREN declining by over 6.6%, Hut 8 falling by over 7%, and TeraWulf falling by over 8%.
Overall, the entire cryptocurrency market declined, with Coinbase stocks and Bitcoin both trading more than 2% down.
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