Microsoft Plans $176M Data Center in San Antonio

Microsoft’s presence in San Antonio continues to expand, even as the tech giant is laying off 10,000 employees worldwide.

Microsoft plans to build a $176 million, 153,000-square-foot data center at the Texas Research Park, located off Lambda Drive on the city’s Far West Side, the San Antonio Express-News reported. That’s about $1,148 per square foot.

The company plans to begin construction on the project, called “SAT40,” on June 15 and is targeting Sept. 15 for completion.

Amid the company’s layoffs, Microsoft is still developing data centers because the business world’s demand for cloud-technology services is increasing, and data centers are lightly staffed, the outlet said.

The Bill Gates-led company has another data center in the works that is expected to be completed sometime in 2024. It’ll be a 245,000-square-foot structure worth approximately $216 million.

“Digital needs in Texas and around the globe are growing,” Microsoft said in a report. “And that means the need for hyperscale data centers is growing too.”

Microsoft already has multiple data centers in the area. The tech giant’s first San Antonio building came in 2005 – a 427,000-square-foot facility also on the Far West Side. In 2015, it built a $1 billion, 1 million-square-foot data center on a 158-acre lot, purchased from the Texas Research and Technology Foundation, the outlet said.

Data centers were in high demand last year, and they’ve proven to be incredible investments in some places. A Chicago investor recently quadrupled its $39 million investment in a data center in four years.

While data centers can increase tax revenues for cities, they can also strain water supplies. Researchers at Virginia Tech estimated that the average data center uses about 300,000 gallons of water a day to keep the technology cool.

“The good news is we’ve been investing for years in ongoing innovation in this space so that fundamentally we can recycle almost all of the water we use in our data centers,” Microsoft president Brad Smith told CNBC in November.