Venture Capitalist Palihapitiya Buys Stake in Arizona Property for Data-Center Bet

Venture capitalist Chamath Palihapitiya is investing in an Arizona land deal, betting that the site could be used for data centers given its potential access to 1,500 megawatts of power.

Palihapitiya teamed up with Anita Verma-Lallian, chief executive officer of Arizona Land Consulting, and other investors to purchase 2,100 acres (850 hectares) of land west of Phoenix called Hassayampa Ranch. The site cost $51 million to assemble but has the potential to be worth $25 billion when completed for data centers, according to Verma-Lallian, who is selling stakes in the project.

The next step is lining up an agreement with the local utility, Arizona Public Service. Eventually, the plan for Hassayampa Ranch is to resell the entitled and power-accessible land to a data-center builder or technology company, Verma-Lallian said.

“Anything over 1,000 acres is called a megasite,” she said in an interview. “This is one of the last ones.”

Demand for data centers has soared as artificial intelligence and cloud storage fuel a bottomless appetite for computing power by tech firms such as Amazon.com Inc. and Microsoft Corp. Land value is largely determined by access to uninterrupted electricity.

The goal for Hassayampa Ranch is to return a high multiple on the investment, similar to a deal last year when Arizona Land Consulting sold a 2,000-acre site near Phoenix for $136 million, a 240% gain on the price it paid for the raw land in 2022.

“Investing in AI Infrastructure is not only critical to solving our economic challenges, it is a matter of national security,” Palihapitiya said in an emailed statement. “This data-center project is led by a great team. I’m excited to partner with Anita and do more of this over time.”

Palihapitiya declined to disclose the size of his stake. Qualified investors, invited by Arizona Land, can buy stakes in the project for a minimum of $250,000.

Palihapitiya, a former Facebook executive, founded venture-capital firm Social Capital. He co-hosts the popular All In podcast and helped to host a fundraiser last year in San Francisco for Donald Trump’s presidential campaign.