Stargate developer Crusoe could spend $3.5 billion on a Texas data center. Most of it will be tax-free.
Elizabeth Frantz/REUTERS
- The Abilene City Council approved a tax abatement for Crusoe's data center campus in Texas.
- Business Insider obtained a copy of the agreement via a public records request.
- Crusoe, the data center developer, could get an 85% property tax break.
The developer of the first Stargate data center in Abilene, Texas, could get an 85% tax break on billions of dollars worth of property, according to a new tax abatement agreement obtained by Business Insider through a public records request.
To qualify for the tax break, AI startup Crusoe will need to spend a minimum of $2.4 billion of a $3.5 billion "targeted investment."
President Donald Trump announced Stargate, a joint venture between OpenAI, Oracle, and SoftBank, at a White House press conference in January. That month, Business Insider reported that Oracle is the tenant of two data center buildings under construction on Crusoe's data center campus in Abilene, which is widely assumed to be Stargate's first site. The estimated cost for those buildings, $1.1 billion, will count toward the targeted investment.
Since then, Crusoe has registered two more data center buildings with a state agency on the site. No tenant is listed for one of those buildings; Oracle is listed as the tenant for the other.
Crusoe has agreed to build six new data centers, each with a minimum square footage of 100,000, on Lancium's land in Abilene. These will join the two it is already constructing for Oracle.
Data centers create jobs—although some say it's not enough
A local news outlet first reported the abatement after the Abilene City Council approved it in February, naming the site's landowner Lancium as the tax break recipient.
The abatement requires Crusoe and Lancium to create 357 new full-time jobs with minimum salaries of $57,600. The does not specify what kind of jobs need to be created, though the hiring timeframe indicates that construction jobs will likely count toward the quota.
Critics of tax abatements for data centers have said that they don't create enough jobs to justify the tax breaks. Proponents like to point out that the sites can employ thousands of skilled laborers during the construction period.
Property tax abatements are common financial incentives used by local governments to encourage companies to operate in their cities and towns. Specific property tax breaks for data centers vary widely depending on locality. Loudoun County, Virginia, home to the world's largest concentration of data centers, does not abate property taxes for data centers. In New Albany, Ohio, a fast-growing data center, data centers have been granted 100% property tax abatements.
Stargate's expansion plans
Oracle executive chairman and CTO Larry Ellison has said the first Stargate data center is in Abilene, though scant details have emerged about the massive AI infrastructure initiative since Trump's announcement.
In February, OpenAI CFO Sarah Friar wrote in a LinkedIn post that the company was evaluating additional locations in Texas, Pennsylvania, Oregon, and Wisconsin for Stargate.
Crusoe announced it is developing a data center campus in Abilene, though it has not publicly confirmed that it is connected to Stargate. Public filings in Texas show that Oracle is Crusoe's tenant, Business Insider reported in January.
To finance the Abilene development, Crusoe entered into a $3.4 billion joint venture with private credit company Blue Owl. JP Morgan has lent $2.3 billion in construction financing to the project.
Lancium declined to comment. Crusoe, Oracle, and the Development Corporation of Abilene did not respond to requests for comment from BI.
Contact Ellen Thomas at ethomas@insider.com or on Signal at 929-524-6964.