West Texas Land is Perfect for Data Centers, Says LandBridge Founder

David Capobianco's company, LandBridge, owns 270,000 surface acres in West Texas, and he's pleased to explain why the land's profitability has tripled in three years. The reason has to do with data centers. LandBridge is a publicly traded affiliate of Five Point Energy, of which Capobianco is CEO. The company's share price is being carefully watched by investors looking for evidence of a new paradigm in land ownership. Acreage once used primarily for ranching or energy extraction in the Permian Basin is now seen as ideal for data centers. In an wide-ranging interview with Cool Vector, Capobianco details the attractive features of his "powered land" in the Delaware sub-basin, spanning West Texas and New Mexico: it sits on top of the lowest-cost natural gas in North America, it has plentiful produced and brackish water for cooling, it is proximate to good fiber connectivity and carbon sequestration resources, and it is governed by an exceptionally friendly Texas regulatory regime. What's more, the Delaware land is far away from any population center, removing community apprehension as a barrier to development. LandBridge's surface acreage is "open for business," says Capobianco, meaning any potential digital infrastructure partner can expect rapid support in the development of data centers, including proprietary water infrastructure developed by LandBridge, which processes some 4 million barrels of water daily across the Permian. Cooling capabilities have become more and more critical as new technology, such as Nvidia's Blackwell chips, runs hotter and hotter. Capobianco describes the opportunity for renewable energy in the Permian as important but not sufficient on its own. Because hyperscalers are locked in an "existential" battle for data center development, the more consistent energy provided by bountiful West Texas natural gas is in high demand. He says the only renewable energy capable of fully powering a data center is nuclear. He also details the business plan of LandBridge, which makes money from land leases as well as power margins and some mineral rights. Capobianco predicts well-suited land in the Permian and elsewhere will "re-rate" now that investors recognize a net new source of revenue in the form of digital infrastructure. Says Capobianco: "The need is great, the race is on." 1:11 Why the Delaware Basin is perfect for data centers 4:40 Energy extraction and digital infrastructure are 'not mutually exclusive' 6:19 Nuclear power is the most effective renewable energy 7:19 How LandBridge economics work 10:03 Water expertise as a competitive advantage 11:58 How long it takes to build and power a data center 14:03 The AI 'existential threat' faced by hyperscalers 15:09 LandBridge's land is 'open for business' 16:53 Which land prices will 're-rate' 18:38 The hyperscaler 'existential threat' 20:12 Changing the paradigm around land 28:00 Bullish on US fossil fuels Visit the Cool Vector website: https://coolvectormedia.com/