Oracle and OpenAI are pioneering a radical approach to AI infrastructure by building a data center in Shackelford County, Texas, that will operate completely off the public power grid. The facility will be powered by hundreds of natural gas generators in what the energy industry calls a “behind-the-meter” microgrid, allowing it to bypass the strained U.S. electrical grid and potentially come online as early as 2026.
This development represents a significant shift in how tech giants are approaching AI infrastructure. The practice of data centers going off-grid is emerging as a direct consequence of the AI race, with companies unwilling to wait years for grid connections to meet the enormous electricity demands of artificial intelligence systems. According to a confidential “Oracle Fact Sheet” document dated September 23, 2025, the microgrid will ultimately deliver 1.4 gigawatts of compute capacity to the data center.
The Shackelford County site is part of OpenAI’s ambitious Project Stargate, which CEO Sam Altman aims to scale to more than 10 gigawatts. Development partner Vantage Data Centers is building a “mega-campus” dubbed “Frontier” that will house 10 data center buildings totaling 3.7 million square feet. Energy startup Voltagrid has been approved to operate 210 industrial gas generators with a combined capacity of 700 megawatts on land leased near the site, according to documents filed with the Texas Commission on Environmental Quality.
This isn’t an isolated case. The first Stargate site in Abilene, Texas, just 40 minutes from Shackelford County, is already powered in part by its own fleet of natural gas generators. Similarly, Elon Musk is using natural gas generators to power xAI’s Memphis data centers and plans to build a private natural gas plant in Mississippi as a more permanent solution.
The boom in data center construction has created a massive bottleneck, with facilities awaiting connection to the power grid facing waits of up to five years, according to the Lawrence Berkeley National Laboratory. By generating their own electricity, tech companies can dramatically accelerate their AI infrastructure deployment timelines, though this approach raises questions about environmental impact and the sustainability of AI’s energy consumption.
Key Quotes
OpenAI CEO Sam Altman has said he wants to scale Stargate to more than 10 gigawatts.
This quote reveals the massive scale of OpenAI’s infrastructure ambitions. To put this in perspective, 10 gigawatts is enough to power millions of homes, illustrating the enormous energy requirements of cutting-edge AI systems and why traditional grid connections are insufficient.
In some cases, the wait could take up to five years, according to the Lawrence Berkeley National Laboratory.
This statement from the Lawrence Berkeley National Laboratory explains why tech companies are turning to off-grid solutions. A five-year wait for grid connection is unacceptable in the fast-moving AI industry, where competitive advantages can be won or lost in months.
Our Take
The emergence of off-grid AI data centers represents a critical inflection point where AI development is literally reshaping energy infrastructure. This isn’t just about building faster—it’s about tech companies becoming de facto energy companies, making decisions that traditionally fell under utility and regulatory oversight.
What’s particularly striking is the speed of this transformation. Just a few years ago, data centers were content to wait for grid connections. Now, companies like OpenAI and Oracle are investing billions in private power generation. This suggests AI’s energy demands are even more extreme than publicly acknowledged.
The environmental implications are concerning. While these companies tout renewable energy commitments, they’re deploying hundreds of natural gas generators to power AI systems. This creates a tension between AI innovation and climate goals that will likely intensify. The question isn’t whether AI will consume massive amounts of energy—it’s whether that energy will be clean, and who gets to decide.
Why This Matters
This development signals a fundamental transformation in how AI infrastructure is being built and powered. The willingness of tech giants to invest in private power generation demonstrates both the urgency of the AI race and the inadequacy of existing grid infrastructure to meet AI’s explosive energy demands.
The shift to off-grid data centers has profound implications for energy policy, environmental concerns, and AI development timelines. While bypassing the grid allows faster deployment, it also means AI companies are making unilateral decisions about energy generation that could impact climate goals. The reliance on natural gas generators, rather than renewable energy sources, raises questions about the environmental cost of AI advancement.
For the broader tech industry, this trend could reshape competitive dynamics. Companies with the capital to build private power infrastructure gain a significant advantage in deploying AI systems faster than competitors dependent on grid connections. This could accelerate AI development but also concentrate power among the largest tech companies. The five-year grid connection backlog suggests this off-grid trend will likely expand, making energy strategy as critical as chip supply for AI competitiveness.
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