Technology firms OpenAI and Oracle have confirmed their partnership in developing Project Jupiter, a major data center campus in Santa Teresa, New Mexico. The facility is a key component of OpenAI's larger Stargate Project, an initiative aiming to invest half a trillion dollars in artificial intelligence infrastructure over the next decade.
The project, which received final local approval last week, represents a potential investment of up to $165 billion over 30 years and is expected to significantly impact the regional economy near El Paso, Texas.
Key Takeaways
- OpenAI and Oracle are partnering on the $165 billion Project Jupiter data center in Santa Teresa, NM.
- The project is part of OpenAI's $500 billion Stargate initiative to build AI infrastructure.
- The facility will create 2,500 construction jobs and 750 permanent operational roles.
- Developers will pay Doña Ana County $360 million over 30 years in lieu of taxes and fund $50 million in water infrastructure upgrades.
- The campus will operate on a self-contained microgrid powered by natural gas, with a goal of 100% renewable energy by 2045.
Project Jupiter's Scope and Economic Impact
Project Jupiter will consist of four data centers designed specifically for training artificial intelligence models. The development is being managed by Austin-based BorderPlex Digital Assets and its partner, Stack Infrastructure. Under the agreement, Oracle will lease the facilities, with OpenAI serving as the end-user.
The financial commitment for the Santa Teresa site is substantial. Developers plan to invest an initial $50 billion over the first five years, with the total investment potentially reaching $165 billion over the next three decades. A significant portion of these funds will be allocated to high-performance computing hardware, such as graphics processing units (GPUs), which are essential for AI development.
According to Nicholas Minor, director of public affairs for Stack, the long-term investment figure includes plans for three complete refreshes of the computer equipment, which typically occurs every five to seven years to keep pace with technological advancements.
Job Creation and Investment
The agreement with Doña Ana County mandates specific employment targets. The project must employ 2,500 construction workers during its building phase and create 750 full-time positions once the data centers are operational.
Local Agreements and Community Contributions
The Doña Ana County Board of Commissioners approved an incentive package for Project Jupiter in a 4-1 vote, which was the final step needed for the project to proceed. In exchange for waivers on property and gross receipts taxes for the 1,400-acre campus, the developers have committed to significant financial contributions to the local community.
BorderPlex Digital will make annual payments of $12 million to the county, totaling $360 million over 30 years. This provides a consistent revenue stream for the county in place of traditional taxes.
Addressing Critical Infrastructure Needs
A key part of the deal is a binding commitment from Stack to provide $50 million to upgrade water and wastewater systems throughout Doña Ana County. This funding is aimed at addressing long-standing water quality issues in communities like Sunland Park and Santa Teresa. An additional $6.9 million is allocated for other community projects, including new facilities for the Boys and Girls Club.
Resource Management: Water and Power
Data centers are known for their high consumption of water and electricity. The developers of Project Jupiter have outlined a plan to manage these resources efficiently and independently from the local grid.
Water Usage Strategy
The facility will use a "closed-loop" cooling system for its servers. This design requires a one-time fill of approximately 10 million gallons of water over a two-year period. After the initial fill, the water is continuously recycled within the system.
Daily water consumption for ongoing operations is projected to be around 20,000 gallons, with a maximum daily cap of 60,000 gallons. This is a fraction of the water used by traditional power plants. The Camino Real Regional Utility Authority (CRRUA) is slated to supply the water for the campus.
Independent Power Generation
To power the massive computing infrastructure, Project Jupiter will not connect to the El Paso Electric grid. Instead, it will build and operate its own microgrid.
- Power Source: The microgrid will initially be powered by simple-cycle natural gas turbines with a capacity of 700 to 900 megawatts.
- Water Efficiency: These turbines are significantly more water-efficient than the combined-cycle turbines used by regional utilities. The power generation facility is expected to use about 20,000 gallons of water per day.
- Renewable Goal: The campus plans to incorporate one of the world's largest battery storage projects. The long-term goal is to transition to 100% carbon-free energy by 2045, likely using solar power stored in the batteries.
Legislative Framework and Local Concerns
The project's ability to operate an independent microgrid was enabled by recent state legislation. New Mexico House Bill 93, passed earlier this year, allows for the creation of microgrids separate from the primary utility network. A late-session amendment introduced by State Sen. Michael Padilla specifically allows these microgrids to bypass interim renewable energy requirements under the state's Energy Transition Act, as long as they achieve 100% clean energy by the 2045 deadline.
"If you want to stand up a project like Jupiter, you should also be able to demonstrate that you can generate the power needed for Project Jupiter. So, this particular piece of legislation makes that permissible now," Padilla stated at a public meeting.
However, the legislative process drew criticism from some local officials. State Rep. Micaela Lara Cadena described the last-minute amendment as the result of "dirty backroom dealing in Santa Fe." County Commissioner Susana Chaparro, the lone dissenting vote on the incentive deal, argued that negotiations occurred at the state level without adequate local involvement.
A Nationwide Selection Process
The Santa Teresa location is one of five sites selected for OpenAI's Stargate data centers. According to OpenAI, the selection was the result of a competitive nationwide search that began in January.
"OpenAI, Oracle, and SoftBank reviewed over 300 proposals from more than 30 states," the company said in a statement. Other confirmed locations include Shackelford County, Texas, and an undisclosed site in the Midwest.
Sam Altman, CEO of OpenAI, emphasized the importance of such large-scale infrastructure. "AI can only fulfill its promise if we build the compute to power it," he said. "That compute is the key to ensuring everyone can benefit from AI and to unlocking future breakthroughs."