Granular Unit Economics per MW
Cruseo CEO Lochmiller broke down the inputs/outputs with high precision (April 2025 contract pricing and the talk)
Upfront capex is ~$59M per MW of developed capacity.
Roughly half (~$30M) is IT (GPUs, CPUs, networking, storage, etc.).
The rest covers data center build, power plant/generation, and other infrastructure.
Annual revenue (pure infrastructure lease/IaaS layer) is ~$15M per MW.
Higher-value managed services/cloud layer can add another ~$15M+ per MW in revenue.
Annual opex is Only ~$1–1.1M per MW (power + other).
Net result is every MW developed can yield $1M+ in annual net revenue as pure infrastructure, with strong margins at the right layers. Payback is attractive (4 years on infra alone)
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Abilene has a brutal weather climate: mid desert with hot summer days (usually 30+ days over 100 degrees F.), low rainfall totals, and small amounts of water available to industry. There’s a whole industry that exist to import water by truck to oil wells for fracking. Long droughts are common.
So why choose Abilene (and many other parts of Texas) to host huge data centers for AI?
Cheap electricity, low taxes, and housing that is affordable for the workers.
Abilene is just north of the Eagle Ford shale, and just east of the Permian Basin. Exceedingly abundant and cheap natural gas. Tons of wind power already installed. Solar+Batteries being installed at break-neck speed. Very little NIMBY advocates, nor many overly zealous environmentalists.
Not one natural lake exists in Texas. They are all manmade, created by damming up scraggly rivers.
I was born in Texas. Ugly land. Good people. As pro-business and optimistic as it gets.
I love living here.
Just one little request.
Quit moving here. We can’t keep up with the skyrocketing demand for infrastructure.
(Okay, Elon can stay. But everyone else? Move to Florida or Tennessee…)
It’s not just the gas, and grid power sources in many cases it is the “Site Heat Rejection” they are dealing with. Most of the gas systems used are Combined Cycle and require cooling for the condenser.
Also further the Data Center itself usually requires cooling. In most cases both of these sources prefer water bodies as the cooling source. There are limits on many smaller lakes, and rivers.
However, an even more difficult hurdle at the moment is that many of the ‘opponents’ to datacenters believe that they “consume”, or “use” water and the water is ‘gone forever’, or just disappears. Which is not the case, the water is simply used as a heatsink and raised in temp a few degrees before being released.
Definitely a public education angle the industry needs to work on.
Also the development of Dry cooling, and getting the cost and complexity of that down to a workable point.
Many combined cycle natural gas plants use air cooled condensers. Costs more than evaporative mechanical draft cooling towers, which evaporate water into the air. Air cooled condenser plants are less efficient than water cooled plants.
Is readily feasible to use the air cooled condensers and air cooled heat exchangers to minimize water use, just more expensive than using evaporative cooling.
They should find a way to use stranded and flared Natural gas to power these West Texas data centers.
Except after ~4 years, all the IT infra (CPUs/GPUs/storage) will need replacing.