Texas towns split over proposed $10 billion AI data center

A proposed $10 billion AI data center campus outside Waco is dividing two neighboring Texas towns over tax revenue, local control and the costs of industrial development. Fortune reported that Infrakey, a new AI data center developer, bought 520 acres of unincorporated farmland next to Ross, where residents may live closest to the project but have little authority over it.

The project has put Ross Mayor Jim Jaska and Lacy Lakeview Mayor Charles Wilson on opposing sides of a fight shaped by Texas municipal law. Fortune reported that Ross has about 200 residents and no taxing authority, while Lacy Lakeview, about seven miles away, is pursuing a path to annex the land and could collect as much as $50 million a year in taxes.

Infrakey’s proposed campus would have nearly 1 gigawatt of power capacity, enough for a midsize city, according to Fortune. The company and Lacy Lakeview approved a nonbinding memorandum of understanding in December 2025 that made Infrakey the city’s exclusive development partner for 12 months while they studied feasibility, financing, annexation and infrastructure arrangements.

Jaska told Fortune he does not oppose data centers in general but thinks this site is wrong for such a project. He said about 200 homes sit near the property’s perimeter in Ross and nearby Elm Mott, and he raised concerns about construction traffic on small roads and the loss of rural land.

Fortune reported that Sara Mynarcik, who inherited 79 acres next to the proposed site, is helping lead local opposition. Mynarcik said she fears that covering farmland with buildings, concrete and asphalt would worsen runoff into White Rock Creek, which crosses her property and nearby land.

Wilson told Fortune that Lacy Lakeview’s interest began after engineers found the city’s 15-inch sewer main was near capacity and estimated an expansion at roughly $18 million. He said Infrakey’s interest in treated wastewater for server cooling appeared to offer both a sewer solution and a revenue opportunity for the city.

Sujeeth Draksharam, an engineer and spokesperson for Infrakey, told Fortune the company had been looking for sites since 2022 and targeted land near power transmission. He said Infrakey is pursuing a wastewater reuse strategy and closed-loop cooling technology, while Fortune reported that project materials and public statements still referred to several million gallons of water use per day.

The annexation plan appears complicated. Fortune reported that Lacy Lakeview may need written permission from Waco because of an existing water and sewer agreement, and would also need to create a three-mile corridor through private property to connect the site to the city. Wilson acknowledged to Fortune that the process could take time and face legal obstacles.

Support is not unanimous inside Lacy Lakeview. Fortune reported that Amy Gage won a city council seat after objecting to the data center plan, and council member Jonathan Olvera said he remains undecided while reviewing the possible financial gains and risks.

State Rep. Pat Curry, whose district includes the area, told Fortune he is skeptical the proposal is as firm as its backers suggest and criticized what he described as a lack of transparency. Draksharam rejected that view, saying Infrakey has spent money on power deposits, engineering and site work and is in exclusive due diligence with a hyperscale customer.

Fortune reported that the dispute reflects a wider fight over AI infrastructure as developers seek land, power, water and transmission access across Texas and other states. In Ross and Lacy Lakeview, the immediate question is narrower: whether the town nearest the proposed campus will bear the disruption while another city controls the deal and collects the revenue.

This story draws on original reporting from Fortune.