Galaxy Digital Advances $400 Million AI Data Center Plan in McGregor, Texas
Galaxy Digital is moving forward with plans for a new data center development in McGregor, Texas, adding another site to the company’s expanding infrastructure footprint in the state as it pivots deeper into AI and high-performance computing.
The McGregor City Council approved plans this week for the project, which Galaxy is calling Project Merlin, according to a report by local broadcaster KWTX. The development is planned for about 500 acres in an open area northeast of SpaceX’s facility in the city.
Galaxy described the project in a presentation to the city as a more than $400 million capital investment that would create more than 30 full-time jobs with average annual salaries above $60,000.
The project is still in an early stage, with city officials saying construction is not expected to begin for several months.
Galaxy told the city that it would pay for infrastructure tied to the project, including power upgrades and electrical interconnection work. The company’s presentation said Galaxy would fund, build and operate its own electrical substation and cover costs for power-related modifications needed to connect to existing transmission lines.
“Any infrastructure upgrades that we need for our power, it’s on us,” Drew Luna, a Galaxy representative, said during the council meeting, according to KWTX. “We pay for that. It comes out of our pocket.”
Water use was among the issues raised by city officials during the review. Galaxy said each building would require about 3,000 gallons of water per day and that the site would use closed-loop cooling systems designed to recirculate water internally. The company also said water usage would be contractually capped, with any additional water infrastructure privately funded and built at Galaxy’s expense.
The project is also designed to keep noise at or below 65 decibels at the property boundary, according to the company’s presentation, which cited a baseline sound study conducted from May 28 through June 5.
The McGregor plan comes as Galaxy has been increasingly recasting itself as a digital infrastructure company alongside its digital asset businesses. Its best-known Texas asset is the Helios campus in Dickens County, a former bitcoin mining site that Galaxy has been converting into AI and high-performance computing infrastructure.
Galaxy acquired Helios from Argo Blockchain during the last crypto downturn and has since turned the site into a central part of its data center strategy. The company has signed long-term leasing agreements with CoreWeave (NASDAQ: CRWV) for AI and HPC capacity at Helios and has secured project financing to support the buildout.
The McGregor project appears separate from Helios but underscores the same broader trend: companies with power, land and large-load development experience from bitcoin mining are seeking to reposition those assets and capabilities for the AI infrastructure boom.
For Texas communities, however, the rapid growth of large data centers has brought closer scrutiny over power demand, water usage, noise and infrastructure costs. Galaxy’s McGregor presentation appeared aimed at addressing those concerns by emphasizing private funding for utility upgrades, capped water use and closed-loop cooling.
City leaders said the council approval was an early step, leaving additional work ahead before construction begins.
