Tech giant Dell plans to invest at least $25 million in its longtime Central Texas headquarters campus over the next five years as part of an incentive program meant to keep thousands of jobs in the state.
The planned investment by the Round Rock, Texas-based Fortune 500 company to add new construction and renovate its owned campus along Dell Way led to the Round Rock Chamber of Commerce to nominate Dell's expansion as a Texas Enterprise Zone-designated project.
The proposal by Dell, which reported record revenue for the second quarter, was unanimously approved by City Council leaders at last week's meeting. The expansion is expected to support data center growth, Dell's continued return-to-office enablement and retain nearly 7,000 employees that qualify under the Texas Enterprise Zone program, according to the city of Round Rock public records.
The Texas Enterprise Zone program refunds part of the state's sales and use tax in a move meant to encourage private investment and job creation in so-called economically distressed areas of Texas. Cities, like Round Rock, can nominate up to six projects every two years to receive a refund of 6.5% of the state's sales and use tax as long as the companies meet minimum investment thresholds, according to the governor's office.
Texas is aggressive when it comes to offering economic incentives to businesses, with Business Facilities magazine ranking the Lone Star State as having the best business climate in the nation for the third year in a row in its 2025 annual report published in June.
Meanwhile, the median household income in Round Rock is $103,670, according to the U.S. Census Bureau, higher than the estimated national median household income in July of $84,260.
"Since 2005, we have done 10 nominations with our last one having been done in 2022," said Zach Scott, senior director of workforce and industry development for the Round Rock Chamber, during the city council meeting. "Historically, Dell has received five designations, all of which have reached their time limits, and this allows for another five years of sales and use tax refund."
If approved by state government leaders, Scott said Dell could be eligible for a maximum state sales and use tax refund of $1.25 million.
Representatives for Dell didn't immediately respond to an email request for comment from CoStar News.
Dell was founded by billionaire Michael Dell in his dorm at the University of Texas at Austin in 1984 and has had its multibuilding headquarters campus in Round Rock since 1994. Earlier this year, Dell told employees it was eliminating remote work privileges and that everyone living within an hour of a Dell office would be required to commute to work five days per week.
Dell's expected investment comes as other tech companies, including Meta, Intel and IBM, have added space to the sublease market in Central Texas. Meta has the Austin-area's biggest sublease on the market totaling more than half-a-million square feet of office space at Sixth and Guadalupe in downtown Austin, according to brokerage Aquila's latest quarterly office report.
Last week, Dell reported its revenue grew 19% year over year to a record-setting second quarter of $29.8 billion. The business growth was tied to the rise in artificial intelligence, executives told investors.
"We’ve now shipped $10 billion of AI solutions in the first half of fiscal year 2026, surpassing all shipments in fiscal year 2025," Dell Technologies Chief Operating Officer Jeff Clarke said in a statement. “Demand for our AI solutions continues to be exceptional, and we’re raising our AI server shipment guidance for fiscal year 2026 to $20 billion."
Round Rock isn't the only municipality in the Lone Star State seeking to offer a Texas Enterprise Zone designation to lure or retain business. Last week, the city of Dallas nominated an office building in Victory Park near Uptown Dallas as an enterprise zone to help Scotiabank put a new U.S. office in the city.
The Canadian bank, one of North America's largest, is expected to lease a big office space in a Victory Park tower after receiving the designation and be eligible for a state and city incentive package totaling more than $12 million.
Scotiabank ranked No. 253 and Dell ranked No. 111 on Fortune’s latest Global 500 list of the world's largest public companies based on revenue.