The United States Army has conditionally selected Carlyle Group and CyrusOne to enter exclusive negotiations to develop and operate hyperscale data centers on Army installations, marking a significant step in expanding artificial intelligence and digital infrastructure capabilities.
The projects will be located at Fort Bliss and Dugway Proving Ground, spanning approximately 1,384 acres and 1,201 acres, respectively. Under the arrangement, the selected firms will finance, build, operate, maintain, and eventually decommission the facilities on underutilized Army land, with no upfront cost to taxpayers.
The initiative is being executed under the Army’s Enhanced Use Lease program, which allows private entities to develop non-excess military land while supporting strategic government objectives. The effort also aligns with federal priorities to accelerate permitting and deployment of large-scale data infrastructure.
The data centers are expected to support the Army’s growing demand for advanced computational capabilities, particularly for artificial intelligence applications. Initial operating capability at Fort Bliss is projected for fiscal year 2027, with Dugway Proving Ground expected to follow in fiscal year 2029.
The U.S. Army Corps of Engineers will play a central role in lease negotiations and technical development, including environmental review and infrastructure planning.
While the selection represents a major milestone, the agreement remains conditional and initiates an exclusive negotiation period to finalize lease terms and project details. The Army expects the initiative to enhance operational capabilities, strengthen national security, and generate significant economic activity, including job creation.
KEY QUOTES
“AI is a strategic asset for the Army. 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.”
Dan Driscoll, Secretary of the Army
“By partnering with the private sector to develop cutting-edge data centers on our installations, we are bolstering our national security, driving technological innovation, and building a more resilient and modern Army. Our new data center initiatives made possible by enhanced use leasing, are a direct investment in Army priorities.”
David R. Fitzgerald, Deputy Undersecretary of the Army
“Ensuring lethality through modernization is a fundamental mission of the U.S. Army Corps of Engineers. We are leaning forward with our full spectrum of talent and expertise to support the Army’s Data Center EUL program. By delivering these critical facilities on an accelerated timeline, we are not just building infrastructure; we are engineering a strategic competitive advantage for the Army and the Nation.”
Lt. Gen. Butch Graham, Commanding General of the U.S. Army Corps of Engineers
“We are pleased to have been selected to enter exclusive negotiations with the U.S. Army on this initiative to advance next-generation digital infrastructure. With deep roots in Washington, D.C., Carlyle brings experience at the intersection of government and industry, along with a strong track record investing in and building large-scale energy and digital infrastructure. We look forward to engaging with the Army, as negotiations progress to deliver integrated solutions at scale.”
Ferris Hussein, Partner, Global Infrastructure at Carlyle
“We are honored to be selected by the U.S. Army to enter exclusive negotiations for the Dugway project. This represents a unique opportunity to support the Army’s modernization objectives through a long-term, commercially driven development. We look forward to working collaboratively with the Army as this initiative progresses.”
Eric Schwartz, Chief Executive Officer of CyrusOne
“U.S. leadership in the global AI race will be decided in large part by who can build the infrastructure fastest. We commend Secretary Driscoll and the Army for recognizing that and developing an innovative public-private model to accelerate it. Through CyrusOne, KKR brings together land, power, and development expertise in an integrated way that cuts through the complexity of large-scale digital infrastructure delivery. We are proud to offer that capability in service of the nation.”
Waldemar Szlezak, Global Head of Digital Infrastructure at KKR
“We are proud to partner with the Army on this important initiative, bringing together our experience in digital infrastructure and innovation. This collaboration reflects a shared commitment to advancing technology solutions that help meet the demands of a continuously changing global landscape.”
Will Brilliant, Partner and Global Head of Digital Infrastructure at Global Infrastructure Partners, a part of BlackRock
