Oracle is seeking to reduce the taxable value of its sprawling new data center campus in Abilene, a move that could shrink local tax revenues despite the company already benefiting from a generous multi-year abatement deal.
The tech giant, which is developing the “Stargate” campus alongside Crusoe Energy Systems, has filed a formal protest with the Taylor County Appraisal District. The company is challenging the county’s $200 million valuation for the first phase of the data center, which it argues is too high.
The dispute will be reviewed by the county’s Appraisal Review Board later this summer. If Oracle prevails, local officials warn it could significantly cut property tax revenue used to fund schools, roads and emergency services — even under the terms of the company’s existing 85 percent, 10-year tax abatement.
“This project is already deeply discounted,” said one local official, who asked not to be named. “A further reduction in valuation would strip away money our community is counting on.”
Under its incentive agreement with the Abilene Development Corporation, Oracle committed to investing at least $2.4 billion and creating 357 full-time jobs with average salaries of $57,600 by 2030. In exchange, it only pays taxes on 15 percent of the site’s assessed value through 2035.
The Stargate campus is part of a broader AI-focused cloud infrastructure initiative supported by Oracle, OpenAI, and SoftBank. The Abilene site is expected to eventually support up to 1 gigawatt of power capacity to run high-demand generative AI tools like ChatGPT. Oracle owns the hardware and leases cloud computing capacity to OpenAI and other firms.
But the project has also raised environmental and community concerns. Crusoe is constructing a $500 million on-site natural gas plant to ensure reliable electricity for the facility, which has been permitted to emit 1.6 million tons of carbon dioxide annually. Critics say the emissions — coupled with the relatively low number of permanent jobs — undermine the public value of the project.
Currently, more than 1,500 workers are employed on the site’s construction, but only a few hundred will remain once the data center becomes operational.
The final tax valuation for 2025 is expected to be determined by late August. If either side is dissatisfied, the case could head to state district court this fall. Meanwhile, Abilene officials will continue to monitor Oracle’s compliance with its incentive agreement to ensure job and wage commitments are met.
The outcome of the dispute could have ripple effects across Texas, where cities and counties are increasingly offering tax breaks to attract major tech and AI investments. As local governments weigh short-term growth against long-term fiscal stability, the Oracle case may serve as a key test of how much communities are willing to give up for a piece of the digital future.