Galaxy Digital acquired approximately 500 acres in McGregor, Texas, on July 28 for its second major artificial intelligence and high-performance computing data center campus in the state. According to the company's official announcement, the site sits inside the McGregor Industrial Park and will be developed under a development agreement with the City of McGregor. The company is working with the McGregor Economic Development Corporation and Heart of Texas Electric Cooperative on the project, with Galaxy's purchase providing approximately $7.5 million in land-sale revenue to the City of McGregor. The development, known locally as Project Merlin, sits on open land northeast of SpaceX's McGregor facility, with the McGregor City Council approving the land sale on June 22.
The McGregor project reflects a significant shift in how utilities and regulators view massive AI loads, as developers are increasingly expected to both fund grid upgrades and prove their demand is real before utilities build around them. Unlike many campus announcements, Galaxy emphasized commitments to privately fund an on-site electrical substation and provide financial assurances for utility upgrades. The company will finance and build its own private substation while providing the financial security required for utility upgrades associated with the project. According to Data Center Knowledge, utilities are placing greater emphasis on whether proposed AI loads are backed by committed customers, financing, site control, permits and construction milestones before making long-term grid investments. Galaxy Founder and CEO Mike Novogratz stated: "We've spent the last several years proving in Dickens County that a privately funded data center can be a real, long-term partner to a rural community. McGregor is the next step in our strategy to build a disciplined, multi-campus data center business."
The company plans an initial 74-megawatt phase that could begin receiving power in 2028, subject to milestones. As reported by crypto.news, the utility has agreed to support construction of interconnection facilities required for the first phase. Operations would ramp after power delivery begins, subject to permitting, construction, utility work and other development milestones. The site will be developed using closed-loop cooling that recirculates water and will fund additional water infrastructure required by the agreement. According to Galaxy's presentation to the McGregor City Council, the project will include six to eight data center buildings and is expected to add at least $130 million to McGregor's property tax base.
The project includes a one-million-gallon ground-storage tank that would be filled gradually during construction to handle initial demand increases. City officials said the stored supply would handle the initial increase in demand, while any additional water infrastructure required by the campus would be privately funded. The approved plan limits each unit to 3,000 gallons per day, with a maximum of 10 units and a campus-wide contractual cap of 30,000 gallons per day. Galaxy Digital plans to use closed-loop cooling that recirculates water rather than continuously drawing an equivalent volume from McGregor's municipal system, reducing strain on local water resources. The project also includes noise limits of no more than 65 dBA at the property boundary through a multi-layered building design with 11-inch precast concrete walls.
The company believes the campus has potential to grow into a multi-hundred-megawatt campus through 2030 after additional transmission infrastructure is completed. As reported by crypto.news, the initial development is one megawatt below the 75 MW threshold that Texas uses to classify large-load customers. The Public Utility Commission of Texas approved ERCOT's Batch Zero process in June, which groups qualifying projects of at least 75 MW into a common study for grid capacity allocation. Galaxy is currently advancing electrical infrastructure required to support the campus and has secured an initial agreement from the utility to support construction of the utility's required interconnection facilities. The second phase is intended to position Galaxy as an "anchor tenant" supporting future transmission upgrades that could accommodate additional industrial development in the region.
The new McGregor campus expands Galaxy's data center business beyond its Helios facility in Dickens County, which has more than 1.6 gigawatts of approved power capacity. According to crypto.news, Galaxy completed Helios Phase I in July, delivering approximately 200 MW of gross power and 133 MW of critical IT capacity to CoreWeave under a 15-year lease. The company separately priced a $3.507 billion private offering of 9.875% senior secured notes due in 2031 to finance part of Helios Phase II. Galaxy's original business centers on digital-asset trading, investment banking and asset management, but the company is increasingly positioning its power-rich infrastructure as a second growth engine. The project represents more than $400 million in planned investment and is expected to create at least 30 full-time jobs paying a minimum annual salary of $60,000.
