Army picks companies to build commercial data centers at Fort Bliss, Dugway Proving Ground
The Army is entering exclusive negotiations with the Carlyle Group and CyrusOne to build and operate commercial hyperscale data centers on military installations in Texas and Utah, the service announced Thursday.
The initiative is being pursued through the Army’s Enhanced Use Lease program, after President Donald Trump issued an executive order directing the Defense Department and other agencies to facilitate data center infrastructure projects that provide jobs and undergird key IT capabilities like the internet, cloud, and AI.
Carlyle has been conditionally tapped to develop a data center at Texas’ Fort Bliss, while CyrusOne has been conditionally chosen to do the same at Dugway Proving Ground in Utah, according to an Army press release.
The department had also been eyeing Fort Hood, Texas, and Fort Bragg, North Carolina, as potential locations for hosting those types of facilities.
In a statement Thursday, Secretary of the Army Dan Driscoll suggested the data centers could support the service’s artificial intelligence initiatives.
“AI is a strategic asset for the Army,” Driscoll said. “It is a force multiplier, supports future transformation and requirements, keeps the Army ahead of our adversaries, and generates resiliency across the force. These data centers are a critical resource to support that strategic imperative.”
The department and the selected companies still must finalize leases and other terms during negotiations.
A solicitation for the data center initiative issued in February indicated that the government was eyeing 50-year leases.
The facility at Fort Bliss, with a project footprint of 1,384 acres, is expected to achieve “initial operating capability” in fiscal 2027. IOC at the Dugway venue, which will cover 1,201 acres, is anticipated in fiscal 2029, according to the Army press release.
Data centers have been controversial and fomented political opposition in some communities because they consume vast amounts of electricity and water for cooling, and can lead to high emissions and strained power grids.
The Army Corps of Engineers will conduct an environmental review for the locations at Fort Bliss and Dugway, according to the press release.
“The companies were chosen through a rigorous and competitive process and will be responsible for financing, building, operating, maintaining, and decommissioning the data centers on underutilized but non-excess Army land at no upfront cost to taxpayers,” officials wrote in the release.
“Developers will build and operate comprehensive behind-the-meter power and water solutions, thereby guaranteeing operational continuity without burdening public systems,” they added.
Eric Schwartz, CEO of CyrusOne, said in a statement that the initiative “represents a unique opportunity to support the Army’s modernization objectives through a long-term, commercially driven development.”
Ferris Hussein, a partner at Carlyle, said in a statement that the project will advance next-generation digital infrastructure and “deliver integrated solutions at scale.”
