Data Center, AI Companies Pay to Upgrade Colorado City's Water System

COLORADO CITY, TX — Cipher Digital, Fluidstack and Anthropic will stand with Colorado City officials Monday afternoon to announce a nonprofit dedicated to fixing the town’s water system. This announcement comes the same week a 300-megawatt high-performance computing campus just outside city limits is slated to begin delivering capacity.

The reception is set for 4 p.m. Monday, Sept. 14, at the Colorado City Civic Center. Speakers include Mayor Ruben Hurt, Mitchell County Commissioner Jeremy Strain, Cipher CEO Tyler Page, Fluidstack Head of Public Affairs Kate Franko, and Anthropic Head of Economic Development Ryan Wilson.

The companies are creating the Colorado City Infrastructure Fund, a 501(c)(3) aimed at water-system repairs in a town that has lived through chronic outages. In July, thunderstorms knocked out power and backup generators at a well-pump station. Pressure collapsed and taps ran dry. That failure sat on top of years of aging pipes and pumps, a situation not unlike any other small Texas municipality in West Texas, including San Angelo's 110-year-old water system.

Cipher’s Barber Lake campus, at 951 County Road 204 in Mitchell County, is a 300-megawatt high-performance computing (HPC) facility on a site that has grown from 250 acres to nearly 600. Fluidstack is the tenant. Google backstops the lease. Anthropic, the company behind the popular Claude AI, is the AI user. Cipher says the plant uses on-site non-potable water only and will not draw from municipal drinking-water sources or raise residential utility bills. Mayor Hurt has said the same thing on the record: the data center is not a city water customer.

What “HPC” means

HPC is high-performance computing. It is not a warehouse for email or a building that streams movies. It is a factory of computers generating what inside the AI industry is commonly referred to as "compute," tokenized computer power to generate AI tasks.

Instead of one office server finishing jobs one at a time, an HPC campus wires together thousands of specialized chips — GPUs, or in Barber Lake’s case Google TPUs, used for Anthropic’s models — so they attack one problem at the same time. Weather models, oil-field simulations, and drug research used to be the classic HPC jobs. In 2026 the same architecture trains artificial intelligence and it uses a great deal of electricity. That is why companies talk in megawatts of electricity instead of square feet. A large language model does not “browse the internet” in a closet. It runs hot, around the clock, across racks that throw off enormous heat.

That heat is why cooling design, in this case closed-loop systems using non-potable water, is critical in data center design. In Colorado City, there is no straw in the city’s drinking wells. HPC is the reason the power numbers are large. A well-built campus can stay off the municipal tap entirely.

For months the Concho Valley argument has been framed as a choice between data centers and water. Colorado City’s announcement is the other West Texas model: the campus stays off the drinking-water system, while the data center and AI companies put money into the pipes the town desperately needed.

Colchis: Cipher’s San Angelo-area site

Cipher is not a distant story on Interstate 20. The company is developing Colchis, a planned 1,000-megawatt HPC campus on roughly 620 acres in the county located about 2,500 feet east of the infamous Emergent Skybox data center's proposed location. Cipher has a signed AEP direct-interconnect agreement and a target energization around 2028 if the governor's temporary halt and audit of statewide data center projects doesn't slow it down. Company filings describe a majority-owned joint venture and land options next to an existing AEP electricity substation called Red Creek. Cipher has told investors the site’s studies and $16 million deposit to the power company, AEP Texas, are in and that it expects Colchis to be included in ERCOT’s "Batch Zero" interconnection process. No tenant has been publicly named. Construction has not started.

If Colchis is built to the Barber Lake standard — non-potable cooling, no city drinking-water tap, and a written community water contribution — it would test the claim that a gigawatt-scale campus has to empty San Angelo’s reservoirs.

San Angelo has already written closed-loop cooling and tight potable-water limits into city ordinance for any data center inside city limits. City staff has said a modeled Skybox-scale use of about 11.3 million gallons a year would be a top-10 customer but a fraction of a percent of treated demand. Previous estimates are that the Skybox will use half the ordinance's water cap or less.

Cipher previously practiced that “show up locally” line in another small West Texas oil town.

Wink's Big Party

Wink, in Winkler County, marked its centennial on Saturday, May 9, 2026, 100 years after the 1926 boom town was founded. Wink's population is under 1,000. It is Roy Orbison’s hometown. It is also home to Cipher’s Black Pearl campus, the 300-megawatt HPC site now leased to Amazon Web Services.

The city threw an all-day street festival along Highway 115 and Bonnie Way. There was a color run, a barbecue cookoff, a car show from 9 a.m. to 3 p.m., more than 50 vendor booths, a kids’ barrel train from the Wink FFA, street magic, and seven live acts headed by Texas country singer Kevin Fowler. Officials dedicated the park behind City Hall to longtime council member Billy Voyles. Local television said hundreds of current and former residents came home for it, and that the weekend pushed tens of thousands of tourism dollars through local businesses.

Cipher co-sponsored the celebration. Afterward the company posted that it was “honored” to help and called itself a partner in the community where Black Pearl operates. That is not a water plant but it is the same political grammar as Colorado City water fund: put a name on the check, stand next to the mayor, and argue that an HPC campus can be a neighbor instead of a straw. Wink got a birthday party and a park dedication. Colorado City is being offered help with the water system that actually failed.

Cipher’s West Texas map

Cipher rebranded from Cipher Mining to Cipher Digital in 2026 as it converted West Texas data center sites from bitcoin halls into HPC campuses for AI tenants. Here is the Texas footprint, site by site:

Operating or delivering now

• Odessa (Ector County) — 207 MW. Cipher’s last full bitcoin-mining plant. Running. The company has said it could later be retrofitted for HPC.
• Black Pearl (Wink, Winkler County) — 300 MW HPC, leased to Amazon Web Services on a 15-year term. First capacity was delivered in August 2026, two months early. Rent has started. Remaining halls are in fit-out; Phase II construction is underway. This is the campus tied to the May centennial sponsorship.
• Barber Lake (Colorado City, Mitchell County) — 300 MW HPC. Fluidstack / Google / Anthropic. Phase I targeted for September 2026 delivery, rent in October; Phase II targeted January 2027. This is the campus tied to Monday’s water fund.

Under construction

• Stingray (Andrews County, west of Andrews) — 100 MW on about 250 acres. Fully financed with an $810 million note offering. Earthwork, pads and underground electrical are underway. First delivery is now described as first-half 2027. No public hyperscale tenant named yet.

In the Pipeline — land and interconnection work, not built

• Colchis (Tom Green County / San Angelo area) — 1,000 MW HPC. Land and AEP interconnect in hand. Target ~2028. Batch Zero candidate. Announcement / pre-construction.
• Mikeska (near Doole / Brady area, McCulloch County) — up to 500 MW. Land rights secured. ERCOT studies submitted. Target ~2028. About an hour from San Angelo.
• McLennan (near Riesel / Sandy Creek plant, McLennan County) — up to 500 MW. Land purchased near the coal plant. Plans not finalized; the company has said it does not intend to use City of Riesel water for cooling. Target ~2028. Town-hall process still ahead.
• Reveille (Cotulla, La Salle County) — 70 MW approved, expansion possible. South Texas, not West Texas. Target ~2027.
• Barber Lake expansion — additional 500 MW on the Colorado City campus listed for 2030-plus.
• Stingray expansion — additional 200 MW listed for 2030-plus.

Elsewhere in Texas, later decade

• Apollo — option on about 288 acres within 25 miles of San Antonio, up to 900 MW. Batch Zero application filed.
• Milsing — East Texas / Houston-area pipeline site, up to 500 MW.
• Ohio’s Ulysses site (200 MW, 2027 target) is Cipher’s first campus outside Texas and is not part of the West Texas water fight.