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Microsoft adding to far West Side data center with $175.9 million expansion project this year

San Antonio Express News logo San Antonio Express News 3/8/2023 By Eric Killelea, Staff writer

Microsoft Corp. is planning to invest millions of dollars in a massive new data center in San Antonio.

The $175.9 million project, which Microsoft has dubbed “SAT40,” will be the latest data center building to land on Lambda Drive in the Texas Research Park, on the far West Side outside of Loop 1604 near Castroville.

The company plans to begin construction of the 153,227-square-foot structure on June 15, according to a recent filing with the Texas Department of Licensing and Regulation. It’s expected to finish Sept. 15.

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Washington-based Microsoft has been building data centers in San Antonio for more than a decade, but the timing of its latest stands out as the company is in the process of laying off at least 10,000 employees across the United States.

Still, tech giants like Microsoft, Amazon and Facebook parent Meta are moving ahead to build a fleet of data centers — the big-box buildings packed with rows of servers — as part of the digital infrastructure connecting people and businesses.

Demand for space in such centers is rising with the increasing number of businesses that use cloud-technology to manage their operations.

“As more people and businesses rely upon technology to stay connected, informed, and productive, digital needs in Texas and around the globe are growing,” according to a Microsoft report. “And that means the need for hyperscale datacenters is growing too.”

Generally, data centers have small staffs and aren’t a beacon of job openings. But San Antonio has been welcoming such facilities, which increase sales tax revenue and are major users of electricity.

Microsoft built its first data center in San Antonio in 2005, a 427,000-square-foot facility in Westover Hills, a community also on the Far West Side but inside Loop 1604.

A decade later, the company bought 158 acres from the Texas Research and Technology Foundation to build a $1 billion, 1-million-square-foot data center about 5 miles west of Loop 1604

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In January 2022, the San Antonio City Council approved a variance to allow Microsoft to remove trees from the Stone Hill neighborhood to clear its path for another data center. In return, Microsoft said it would plant more than 800 trees and pay $1.4 million to a city fund that aims to plant trees throughout the city.

Among other projects, Microsoft in August notified the state it was planning to build a $215.9 million, 245,000-square-foot data center on the far West Side, off Highway 151 near SeaWorld. Construction there is scheduled to finish next year.


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