Here’s an angle on the data center story that I hadn’t considered before.
Stargate was pitched to Abilene by some of the biggest names in artificial intelligence, including Oracle and Open AI.
Executives said the project would give the United States a comfortable lead in the AI arms race against China. Plus, it would create thousands of jobs. Abilene — as the flagship city of the project — would see the biggest economic returns.
President Trump announced the project during a White House press conference in January 2025.
“Together, these world leading technology giants are announcing the formation of Stargate, so put that name down in your books, because I think you’re going to hear a lot about it in the future,” Trump said.
To incentivize Stargate to continue investing, the Abilene City Council gave Stargate an 85% tax abatement. Even with the tax break, Oracle said Abilene will get an estimated $30 million annually from an area that used to be a field of mesquite trees and the influx of workers into the city.
The project created 9,000 immediate construction jobs and is expected to create 1,000 long-term jobs once it’s completed, representatives from Oracle said.
More than two years into construction for the project, city leaders say they are starting to see economic gains. In a promotional video for Stargate, Misty Mayo, the CEO of the Development Corporation of Abilene, said the influx of people coming to Abilene to build Stargate is keeping stores full and local businesses flourishing. She also said the property tax revenue is helping revitalize the city’s downtown and public school system.
“New tax revenue funds new roads. New tax revenue makes a new grocery store interested in expanding into your community, because now they can make money,” she said in the video.
KUT News requested interviews with Mayo and Mayor Weldon Hurt. Hurt did not respond to requests for comment, and Mayo’s team said she was unavailable.
Speaking to local business owners on Abilene’s downtown strip, the answer to whether Stargate has stimulated business is mixed.
[…]
Diana Luna is a self-described “techie” who is also campaigning to become a Texas state representative.
“I actually thought that as somebody that comes from a technological background that I kind of knew [what] was coming,” she said about Stargate. “But the economic effects for the most vulnerable communities are actually what I did not see coming.”
Most concerning to Luna is the housing crisis that’s unfurling in Abilene. Like many others, she blames Stargate. She’s critical of the promises made by city leaders about the project.
“If we’re supposed to be in this economic boom, where is the money?” Luna said. “Because nobody feels like we’re in an economic boom. Nobody feels that ‘Texas miracle’ here. Everything’s just getting more expensive.”
She said the city was already struggling with housing shortages before Stargate and thousands of workers converged on the city.
“We have three universities and one large Air Force base here,” she said. “So this is exacerbating what’s already a housing shortage in this area.”
Abilene Christian University said in June that more than 100 of its incoming students did not have a place to live for the upcoming fall semester. University officials blamed the city’s rental market, saying properties traditionally leased to students are now being purchased, repurposed or converted into short-term housing. To fill the gap, the university said it plans to reopen a former residence hall that had previously been slated for demolition.
The housing shortage, Luna said, has also caused the city’s rent prices to skyrocket, leaving many residents suddenly struggling to afford rent.
The average rent in Abilene is almost $2,600 a month, according to Zillow. That’s up nearly 50% since last year. On average, it’s cheaper to rent in Austin right now than it is in Abilene.
That is just a wild statistic. One of the big draws of places like Abilene is precisely that it costs less to live there than it does in the bigger and more cosmopolitan urban centers. Not so much now. And if you’re thinking surely they must have a lot of open space outside the city for housing construction, read the beginning of this story, which is about a family that moved to the outskirts of Abilene, near to family that lived in a house they had for decades, and now they’re surrounded by data center construction, rendering their neighborhood more or less a dead zone. Where do you think Stargate would be built, after all?
Anyway. The average rent in Houston is $1,900 a month, per Zillow. I would not have guessed we’d be cheaper than Abilene by any amount, let alone by that much. Also, here’s Diana Luna‘s campaign webpage. She’s running in a tough district, to say the least – it went 76-23 for Ted Cruz over Beto O’Rourke in 2018 – but at least she has a strong issue to campaign on. I’ll be interested to see if she bends the curve at all.