Fluidstack breaks ground on a $4 billion Texas data-center campus, no tax breaks attached
The AI cloud startup started site work on 1,100+ acres near Rio Hondo under a closed-loop cooling mandate the county imposed after local pushback on water use -- and is paying full property taxes to get it.
Fluidstack began site work on September 10, 2026 on the first phase of a $4 billion AI data-center campus on more than 1,100 acres near Rio Hondo in Cameron County, Texas, after the county issued a worksite permit the day before. The company projects more than 2,500 construction jobs and several hundred permanent operations roles once the facility is running. Cooling water comes from the East Rio Hondo Water Supply Corporation through a closed-loop system that recycles water rather than losing it to evaporation -- a design Fluidstack says uses less water than one Olympic-sized pool, refilled repeatedly rather than drawn continuously.
Built to a standard the county wrote after a fight
Cameron County passed a resolution in April 2026 opposing open-loop evaporative cooling systems for new data centers, after water consumption became the central objection to AI infrastructure projects in the water-stressed Rio Grande Valley. Fluidstack spokesperson Kate Franko said the company is paying its own way on "our energy, our infrastructure, our water" and full local property taxes, with no tax abatement attached to the project. U.S. Rep. Vicente Gonzalez had separately raised concerns about the region's water supply given how water-intensive data centers can be -- underscoring why the cooling design, not the dollar figure, was the condition local officials cared about.
The financing behind it, and what it isn't
Fluidstack raised an $830 million Series A in July 2026 at a $7.5 billion valuation, and separately is reportedly in talks with the Pentagon's Office of Strategic Capital for a roughly $5 billion loan aimed at data-center supply-chain manufacturing capacity -- not at financing a specific facility like this one. The Cameron County campus is being funded and built as its own project, a distinction worth keeping straight as Fluidstack's name shows up across multiple, separately structured deals in the same stretch of weeks.