Eric Schmidt-backed data center venture is negotiating a major deal with Google

Bolt Data and Energy, a data center development company co-founded by former Google CEO Eric Schmidt, is currently in negotiations to kickstart a significant data center initiative in West Texas. The discussions involve a potential partnership with Google, Schmidt's previous employer, as reported by sources familiar with the situation. According to insider information, Google is contemplating a commitment of 250 megawatts for the project. However, another source indicated that it's premature to define the size of the potential agreement, as negotiations are still ongoing and confidential. A Google representative declined to provide comments on the situation, stating, "We don't comment on rumors." Last year, Google laid out plans to invest $40 billion in cloud and AI infrastructure in Texas by 2027, showcasing the urgency among tech giants to secure essential resources to support AI advancements amidst rising costs and financial uncertainties. In December, Bolt successfully concluded its initial funding round, raising $150 million, with $50 million coming from Texas Pacific Land Corporation (TPL), a company that owns significant land in West Texas. This partnership allows Bolt to establish data centers on TPL's properties, which promise abundant power and water resources—critical elements for cooling in data center operations. The preliminary plans suggest that Bolt will commence with a 250 megawatt facility, with aspirations to expand in increments of 250-500 megawatts, ultimately aiming for a 5 gigawatt campus. This venture is among several ambitious projects in Texas aimed at supporting the AI sector. Additionally, Fermi, a public company co-founded by former Texas Governor and U.S. Energy Secretary Rick Perry, is planning an 11-gigawatt data center campus in Amarillo. In a related development, reports surfaced that Amazon had retracted a $150 million cash advance intended for Fermi's initial project phase, leading to a steep drop in Fermi's stock value by 50%. Meanwhile, financial institutions that provided $38 billion to fund data center constructions for Oracle and OpenAI are facing challenges in distributing parts of that loan to other banks and investors, primarily due to concerns about the impact of Oracle's substantial AI expenditures on its credit. In response, Oracle announced plans to raise up to $50 billion in debt and equity by 2026 to support its AI infrastructure while maintaining a robust investment-grade balance sheet. Recently, Alphabet, Google's parent company, disclosed in its fourth-quarter earnings report its intention to allocate between $175 and $185 billion for capital expenditures in 2026, which is expected to be roughly double its 2025 spending, primarily aimed at bolstering AI resources. This year, major technology firms, including Amazon, have announced unprecedented spending on AI, with Amazon stating it would invest $200 billion alone this year.