Army reaches conditional agreement with private industry for hyperscaled data centers at Fort Bliss and Dugway

The U.S. Army has conditionally selected two companies to enter exclusive negotiations to build and operate commercial hyperscaled data centers on two Army installations under the Enhanced Use Lease program. The companies were chosen through a rigorous and competitive process. Global Investment Firm Carlyle was selected for a project on about 1,384 acres at Fort Bliss, Texas. CyrusOne, a portfolio company jointly held by funds managed by KKR and BlackRock, was selected for a project on approximately 1,201 acres at Dugway Proving Ground, Utah. The companies 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. Secretary of the Army Dan Driscoll said AI is a strategic asset for the Army. It supports future transformation and requirements, keeps the Army ahead of adversaries and generates resiliency across the force. Deputy Undersecretary of the Army David R. Fitzgerald said the partnerships bolster national security, drive technological innovation and build a more resilient and modern Army. The effort aligns with the White House 2025 executive order on accelerating federal permitting of data center infrastructure and is authorized by Title 10 U.S. Code section 2667. Initial operating capability at Fort Bliss is projected for fiscal year 2027 and at Dugway Proving Ground for fiscal year 2029. The U.S. Army Corps of Engineers will conduct lease negotiations and provide technical expertise including environmental review. Lt. Gen. Butch Graham, USACE commanding general, said the Corps is leaning forward to support the data center program and deliver critical facilities on an accelerated timeline. The selection allows the Army and partners to enter an exclusive negotiation period to finalize lease and other terms. The initiative will enhance computational capability for the warfighter and create a projected significant number of American jobs.