Microsoft Plans $400M Data Center In Fast-Growing San Antonio Hub

Microsoft has filed plans to build a new data center in Castroville, Texas, a project that will expand the tech giant’s substantial data center footprint in and around San Antonio. 

The project, first reported by My San Antonio, consists of a standalone data center totaling nearly 200K SF and is estimated to cost $400M. According to Microsoft’s filings with state regulators, construction is set to begin in August, although local media reports that construction equipment is already present on the site. The data center’s target completion date is June 2028. 

While Castroville, around 10 miles west of San Antonio, is a small town with just 3,000 residents, the project will be Microsoft’s fourth development in the town and its seventh in Medina County. The tech giant has established San Antonio as one of its major southwest hubs, with at least three additional campuses either in operation or in development just west of the city. 

But Microsoft isn’t the only digital infrastructure giant expanding its presence in the Alamo City, which has emerged as one of the fastest-growing data center markets in the world. 

According to JLL data published last summer, the San Antonio-Austin market grew by close to 500% since 2020 — an explosion of growth that trailed only Columbus, Ohio, in its speed and scale. As of August, the market has 921 megawatts of total inventory, with 341 MW under construction and 1,358 MW in its planning pipeline. 

Beyond Microsoft’s planned Castroville facility, several major projects have joined that development pipeline since the start of this year.

Earlier this month, HC Capital Partners and Herrmann Family Cos. unveiled plans for Energy Ranch, a gas-powered data center campus spanning more than 1,500 acres about 60 miles south of San Antonio. Meanwhile, Amazon announced this week that it is planning an $88M expansion of its San Antonio data center, adding 132K SF.

As in many other fast-growing markets, data center development has come under scrutiny from local lawmakers, with the San Antonio City Council considering measures to track and regulate how data centers in the city use water and other natural resources.