High-speed rail pitches data center deals. Merced, Madera leaders push back

Key Takeaways

California High-Speed Rail is exploring leases of land, fiber and power to data centers along its corridor.
CEO Ian Choudri says hyperscalers are discussing Central Valley sites, including Kern County.
Madera and Merced officials warn of water use and grid strain from potential facilities.
A co-development deal is signed to monetize corridor assets, with an energy-focused deal expected soon.
The Merced–Bakersfield segment targets 2033 service; full SF–LA is eyed for about 2040 at $126 billion.

The line that stuck landed like a horn blast. "Just build the train, dude." Merced Mayor Matthew Serratto said it after reading a state plan that floats using the high-speed rail corridor to attract data centers and sell them access to land, fiber and electricity.

For Central Valley readers, the proposal isn’t abstract. The first trains are slated to run between Merced and Bakersfield, and the authority says companies are already kicking tires in Kern County. That could mean new industrial neighbors near stations in Merced, Madera and Fresno, with real questions about water, power and land use.

What changed in the plan

On June 1, the California High-Speed Rail Authority approved a business plan that goes beyond tickets and stations. Facing a $126 billion price tag and past federal cuts, the agency says it must squeeze revenue from everything in the right-of-way. Officials outlined two tracks for private money: a signed co-development agreement to match corridor assets with paying customers, and a second deal, expected within months, aimed at monetizing energy infrastructure like solar, batteries and substations.

CEO Ian Choudri told the board the corridor will carry fiber connectivity and clean power. He added that large operators are in talks about Central Valley locations. The idea, in short, is to make the corridor pay.

Valley stakes: water, power and local say

Madera Mayor Cecilia Gallegos said her city would reject data centers because of heavy water use. A Bakersfield spokesperson said the city hasn’t seen any proposal to lease land, but they’re watching. Not a water-hogging server farm.

Public commenters raised familiar worries: cooling and water demand, battery fire risks, noise, and whether tech infrastructure starts to eat into farm ground. Serratto said he’s wary of outside firms setting the terms. Land-use calls sit with local councils and the supervisors, he said, and they’ll expect straight answers about grid upgrades and who pays. A plastic water cup sweated on the dais.

What the rail authority says

Board chair Steve Kawa said the authority isn’t proposing to build or run data centers. The focus is the train. But the agency argues that lining up private buyers for corridor assets could help fund operations once trains roll. Choudri framed it as practical: if tech companies invest around the route, they might also become long-term partners for the rail line.

Valley officials hear the pitch, they want specifics. How much new load would hit the PG&E feeders that serve east Merced County. Whether closed-loop cooling is on the table in dry months. What tax base and jobs would look like next to an HSR station site on Martin Luther King Jr. Way in Merced or along the Madera construction footprint.

Timeline and money

Project insiders hope these commercial deals help open Merced to Bakersfield by 2033, then push north to Gilroy, with a San Francisco–Los Angeles run roughly seven years later. That calendar would bring trains through the Valley first, so the debate over server farms won’t stay theoretical here for long.

Serratto listened, then cut to it. "But really," he said, "just build the train, dude."

Central Valley AI is produced by the CVAI Newsdesk team and developed by Kaweah Tech, a regional firm that builds, deploys, and integrates AI solutions for businesses across California's Central Valley.

Source

https://www.sfchronicle.com/california/article/high-speed-rail-data-center-22306025.php