Eric Schmidt-backed data center venture is negotiating a major deal with Google

• Bolt is a data center development firm co-founded by former Google CEO Eric Schmidt last year.
• The company is in talks with Google to anchor a large campus it plans to build in West Texas.
• Google and its Big Tech peers have unveiled record spending on AI infrastructure in 2026.

Bolt Data and Energy, a data center development firm that was cofounded late last year by former Google CEO Eric Schmidt, is negotiating a deal that would allow it to begin construction on a large data center project it is planning in West Texas.

Schmidt's firm is in discussions with Google, his former employer, according to two people with direct knowledge of the talks. The tech giant, one of the leaders in the race to develop and commercialize artificial intelligence, is considering a commitment of 250 megawatts, according to one of the people. The other person said it was too early to characterize the exact size of the potential transaction because it was still under discussion.

The sources spoke on the condition of anonymity because the potential transaction is still being arranged and the talks are confidential.

"We don't comment on rumors," a Google spokeswoman told Business Insider, declining to comment further. Google announced last year that it plans to build $40 billion of cloud and AI infrastructure in Texas by 2027.

The potential deal highlights how Big Tech is racing to secure the power, physical infrastructure, and land needed to fuel AI, even as the costs and financial risks of those bets loom.

In December, Bolt completed its first funding round, raising $150 million from investors, including $50 million from Texas Pacific Land Corporation, a public company that owns large tracts of land in West Texas. As part of the investment from TPL, Bolt will develop data centers on land in TPL's portfolio.

A presentation detailing Bolt's development plans, shared with Business Insider, said that TPL's land would give it access to abundant power and water for cooling. These commodities have become increasingly strained as data center development has boomed around the country.

The presentation states that Bolt's development would begin with an "initial 250 megawatt facility" and expand in 250-500 megawatt increments into a 5 gigawatt campus.

Bolt's plan is one of several large-scale projects that have been envisioned in Texas to cater to the AI race. Fermi, a public company co-founded by former Texas governor and US Energy Secretary Rick Perry, has plans for an 11-gigawatt campus in Amarillo.

In December, Business Insider revealed that Amazon had pulled back a $150 million cash advance it had pledged as part of a preliminary deal to anchor the project. Fermi's disclosure of the reimbursement of that advance caused its stock to fall by 50%. Fermi's CEO, Toby Neugebauer, told Business Insider that although Amazon had reclaimed its advance, the negotiations for it to take space with Fermi were still ongoing.

Major bank lenders who extended $38 billion to finance the construction of data center campuses in Shackleford County, Texas, and Port Washington, Wisconsin, for Oracle and OpenAI, meanwhile, have had difficulty selling off pieces of the huge loan to other banks and investors. Those troubles stem, in part, from worries about whether Oracle's credit will be strained by its massive AI spending.

To help allay concerns, Oracle announced it would raise as much as $50 billion in debt and equity in 2026 to continue to pursue its AI buildout while also maintaining "a solid investment-grade balance sheet."

Last week, Alphabet, Google's parent company, revealed in its fourth-quarter earnings report that it plans to spend between $175 and $185 billion on capital expenditures in 2026, roughly double its outlay in 2025. The spending is being done largely to pay for AI equipment and infrastructure.

A record wave of spending has been announced by big technology companies on AI this year, including Amazon's disclosure during its earnings last week that it would spend $200 billion alone this year.