Poolside, backed by Nvidia, to build $16 billion gas-powered AI data campus in Texas

Poolside, the AI startup backed by Nvidia, is building a gas-powered data center campus in West Texas alongside cloud infrastructure company CoreWeave, according to Wall Street Journal.

The project will span more than 500 acres of land owned by the Mitchell family, who have deep roots in Texas’ oil and gas industry. The site sits in the Permian Basin, the country’s most active natural gas hub, and will generate its own electricity instead of relying on the Texas grid. The project is called Horizon.

The land is part of Longfellow Ranch, a massive ranch owned by the Mitchells that covers hundreds of thousands of acres.

Eiso Kant, co-founder of Poolside, said Horizon will be rolled out gradually to avoid overloading any systems and will eventually provide two gigawatts of compute, equal to the entire output of the Hoover Dam. Kant added, “It is not about your headline numbers of gigawatts. It’s about your ability to deliver data centers,” describing infrastructure itself as “the real physical bottleneck in our industry.”

Poolside to tap local gas plant for self-powered data hub

The companies plan to take full advantage of the natural gas already flowing from the ground in the Permian Basin. The Horizon campus will use an on-site gas plant built years ago by Occidental Petroleum, as well as surrounding pipelines, to produce its own power.

The site is also near processing plants and is already connected to long-haul fiber networks needed for fast data transfer. Kant said this setup should reduce operational costs and avoid the issues other projects face when power and compute are separated.

CoreWeave will be the first tenant on the campus, taking on 250 megawatts of capacity expected to come online by the end of next year. The company has also locked in another 500 megawatts for later expansion. Full construction is expected to wrap up in early 2027.

The companies didn’t share what they’re paying to lease the land, or the full cost of the project, but Kant gave a benchmark: a two-gigawatt facility like this would usually cost $16 billion, excluding chips. He said modular construction off-site could help cut that cost down for Poolside.

Starting December, Poolside will also get early access to Nvidia-powered AI infrastructure through CoreWeave, a temporary solution while the larger campus is under development. This agreement adds to the list of high-stakes deals in the AI infrastructure war, where companies like OpenAI and xAI are rushing to build capacity across the U.S. OpenAI has said it expects to need over 20 gigawatts just for its AI model ChatGPT, and has announced several new data center builds to meet that demand.

Texas grid faces pressure as AI data centers multiply

Texas has become a central target for new data center builds.OpenAI is working with Oracle on the Stargate facility in Abilene, while other unnamed builds are underway across the state. But with this growth has come major concerns.

Critics have warned that these centers use massive amounts of power and water, and could place serious strain on Texas’ power grid. Unlike other states, Texas operates its own grid, and there are limits to what it can handle.

New legislation now gives the state’s grid operator authority to cut off power to large-scale energy users, including data centers, during emergencies. Poolside is trying to avoid those risks entirely by building in the ability to self-generate power. Still, with more companies pushing into Texas for space and energy, it’s unclear how long even that edge will hold.

Poolside is also raising another $2 billion in funding. If successful, the company’s valuation would rise to $14 billion, up from $3 billion a year ago when it brought in $500 million.

The company says it wants to build AI systems with humanlike intelligence, and sees Horizon as a big piece of that vision. Nvidia’s involvement also means Poolside will have chip supply locked down, a critical advantage in the compute shortage sweeping the industry.

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