If you live in New Mexico and haven’t heard of “Project Jupiter” you’re going to want to keep reading…
The idea behind it is to build a “hyperscale AI data center campus” along the border near Las Cruces and El Paso. The total cost is listed at $165 billion and, if the complex were to be fully developed, it would likely be the largest in the nation.
Either way, $165 billion is the largest IRB (Industrial Revenue Bond) anyone’s ever heard of that we could find. If it helps to visualize just how big that is, a bond used to complete Denver’s recent airport renovations was only $2.5 Billion. That included 39 new concourse gates and increased overall capacity of 30%.
The actual company looking to build a data center in the desert of Southern NM is hidden behind a newly formed company named BorderPlex Digital Assets, LLC. This is a common practice by Big Tech companies: they form a new LLC or hire a new team to operate it for initial legal and financial negotiation, in a bid to avoid full conversation about the costs vs. benefits.
While we can’t 100% identify the company, based on size alone it’s almost certainly a major player like Nvidia, Google, or Oracle. It’s also likely they’ve worked closely with NM Economic Development Department on multiple aspects of the project for 12+ months (more on that in a bit).
After agreeing to consider the project, the Doña Ana County Commission is now preparing for a September 19th public hearing/vote on devoting taxpayer money to Project Jupiter. Unfortunately, there are still few publicly available details about potential water usage, electricity demand, or impacts on local ratepayers.
This project poses significant risks to the environment and to our neighbors in Southern New Mexico. So we dug in to take a look at some of the potential costs vs. benefits for the region.
A Deeply Unpopular AI Cash Grab
The push for Project Jupiter is part of a larger trend of tech companies building massive AI data centers across the country.
This trend has been met with resistance in other areas like Tucson, AZ and St. Charles, MO, where citizens have successfully stopped similar projects. According to residents, these massive projects simply aren’t worth the considerable risks to safe/clean drinking water and air.
AI industry hype is also a concern – companies are burning through billions of dollars monthly with no meaningful returns, according to a popular tech newsletter. Recent studies also show AI use is inefficient and over-hyped, like a recent MIT study that found 95% of generative AI pilots at companies are failing. If that bubble pops, local governments could be left holding the bag.
Additionally, Wall Street private equity firms like Blackrock and Blackstone are adding to the hype by gobbling up regional electric operators in an attempt to profit off of AI data center electricity needs. Here in New Mexico, Blackstone currently has an $11.5B pending acquisition of Public Service Company of New Mexico (PNM), which is slated to go before the Public Regulation Commission this Fall.
Who’s Behind Project Jupiter?
BorderPlex Digital Assets has a team of individuals from big tech backgrounds, including investors and Big Tech executives from Texas and San Francisco.
It also includes NM’s former Economic Development Secretary, Alicia Keys, who is well connected and may well have been involved in crafting the deal before current EDD Secretary Rob Black was appointed by Gov. Michelle Lujan Grisham in September 2024.
While Project Jupter is currently shrouded in secrecy with numerous NDAs and legal contracts, some of the initial documents do shed light on the playbook they’re operating under, and who stands to benefit from it. For example, a memorandum of understanding between the State of New Mexico and BorderPlex Digital outlines what the state is willing to do with taxpayer resources.
And although this project is larger than others in New Mexico, it’s a familiar playbook that started in 2016 with Meta/Facebook’s data center in Los Lunas. It also showed up more recently in the Chaves County Commission’s approval this month of a 300 acre data center near Roswell.
Already Not Much Water, Already Lots of Problems
All of this is playing out against a background of existing challenges and scarce water resources in the region. 80% of groundwater used in Doña Ana County already goes to irrigated agriculture, while 15% goes to public water supply.
The area is consistently rated as being in extreme levels of drought, so any change to groundwater or surface water resources would likely strain both local water systems and farming/ranching in the region.
Few cases better illustrate that strain than Camino Real Regional Utility Authority (CRRUA), which has consistently failed to provide safe drinking water to 19,000 people in the Sunland Park, Santa Teresa and southern Doña Ana County area. CRRUA is listed as the primary sewer/water contact on the bond application for Project Jupiter.
Weighing the Costs vs. Benefits
The costs of Project Jupiter will be borne by local communities, while the benefits will primarily accrue to the private company. The question, as is often the case with projects that economic development leaders eagerly embrace, is whether it’s worth it or not.
$300M cash payment – as is typical with this type of bond, the company has pledged cash payments instead of taxes (called a PILOT aka Payment In Lieu Of Taxes). While this is not a small amount of money, it may not be enough to offset the harms of the project. It also does not appear that this money is legally obligated by stages, so we don’t know what percentage of the money would go to the county if they failed to build or pulled out in the middle.
Full time jobs – the project will supposedly include 2,500 construction jobs and 750 permanent full time jobs with average salaries of $75-100K.
However, there is no requirement that the construction jobs go to New Mexicans or that the project work with local construction companies. Advances in automation also mean it takes fewer IT/tech people to run a modern data center.
Because the job numbers and categories are currently redacted on the bond application, it is an open question as to how many of those jobs are lower paying and could include potential exposure to water and air pollution at a desalination plant or power generator plant.
In both cases, there also appear to be no legally binding “clawback” provisions built in, where if the company fails to hire for positions, the local government typically receives additional compensation.
Environmental costs – the project’s potential environmental implications are also alarming. That memorandum we mentioned earlier between the State of New Mexico’s Economic Development Department and Borderplex Digital Assets lays out the resources and taxpayer funds the state is willing to contribute to the private company’s construction and development.
There are a number of concerning issues, but included among them is that the state will consider natural gas and nuclear resources as a “zero carbon resource.” In other words, if the company decided to take a similar tack as Elon Musk’s xAI in South Memphis, Tennessee, they could use gas turbines that spit out tremendous amounts of air pollution to drift over to local elementary schools, community centers, and ranches/farms and this would allegedly be considered excusable or legal under state law.
And, the MOU also authorizes the project to build and use nuclear power if they want, despite evidence of the industry failing… no, we are not kidding. Add to that the desire to use oil & gas style fracking to pull up brackish (salt) water from deep in the ground, and you end up with multiple potential disasters for the local community, as well as exposure risks for workers on site.
The Path Forward
Add all of this up and it’s safe to say it’s been a pretty confusing rollout so far…
As NM HD 35 Rep. Angelica Rubio pointed out in a recent op/ed, there are powerful and wealthy people who stand to gain from Project Jupiter while traditional neighborhoods, working families, and Indigenous communities are being told once again to bear the costs in the name of “progress.”
Despite the attempt to push the project through in less than a month, community organizations like Empowerment Congress and NM Environmental Law Center have done an impressive job of rallying for transparency.
Which leaves us with this question for state government officials, local legislators, and the Doña Ana County Commission: is the project worth it?
We believe the answer is a resounding “no.” It’s time for our leaders to prioritize the well-being of Southern New Mexico’s communities and environment over the interests of private corporations.