Microsoft to Invest $400 Million in New Texas Data Center

Microsoft Announces $400 Million Data Center Investment in Castroville, Texas

January 12, 2026

In a significant expansion of its cloud infrastructure, Microsoft Corp. has filed plans for a new $400 million data center in Castroville, Texas, underscoring the relentless demand for computing capacity driven by artificial intelligence and cloud services. The move highlights the strategic importance of the Texas market for major hyperscalers seeking scalable power and land for their growing digital empires.

According to filings with the Texas Department of Licensing and Regulation made in December 2025, the project, internally dubbed SAT 82, will be located at 2580 Farm to Market Road 471 N in Castroville, a town west of San Antonio. Construction on the single-story facility, spanning approximately 195,670 square feet (18,178 square meters), is scheduled to commence in mid-August 2026, with an anticipated completion date of June 2028. The facility's design includes Tier II infrastructure for both IDF (Intermediate Distribution Frame) and AZNG (Azure Network Gateway) networks, which are critical for reliable data routing and connectivity.

This latest filing represents a continued build-out in the Castroville area by the tech giant. Microsoft is already developing the SAT 80 and SAT 81 data centers at a separate location in the town and, in March 2025, filed for two additional buildings to form a larger campus. The scale of investment in the region is substantial; a separate project filed in July 2024 for a data center also named SAT 82, though at a different address, carried an estimated price tag of $482.6 million. It remains unclear if the newly announced $400 million facility is an addition to or a revision of that earlier plan.

The implications of this investment are multifaceted for the data center industry. It reinforces Texas, and the San Antonio corridor in particular, as a premier destination for hyperscale development, offering favorable conditions for growth. Microsoft's deepening footprint, which includes several other operational and developing sites across San Antonio, strengthens its South Central US Azure region launched in 2008 and supports the growing computational needs of both commercial and government clients in the area. This sustained construction activity signals robust, long-term confidence in the underlying demand for cloud and AI infrastructure.

Source: datacenterdynamics