US Army taps Carlyle and KKR to develop $2bn AI-focused data centres

Carlyle Group and KKR have been selected by the US Army to construct two large-scale data centres to support the military’s expanding use of artificial intelligence, with each project valued at roughly $2bn, according to a report by the Financial Times.

The facilities, to be located at Fort Bliss in Texas and Dugway Proving Ground in Utah, will be financed, built, and operated by the private equity firms under long-term leases. The army will not contribute capital to the construction but will receive dedicated access to a portion of the computing capacity for operational use. Any excess capacity is expected to be sold commercially.

Army Secretary Dan Driscoll said the ongoing conflict in Iran highlights the growing demand for AI-driven capabilities in modern warfare.

At Fort Bliss, Carlyle Group will develop a 2.5–3GW facility across approximately 1,384 acres, with initial operations expected at 200MW in 2027 and full capacity by 2028. KKR will construct a 1GW data centre at Dugway, utilising its portfolio company CyrusOne, jointly owned with BlackRock, on 1,201 acres, with operations projected to begin in 2029.

David Fitzgerald, deputy under-secretary of the US Army, emphasised the strategic importance of these centres, noting that the army currently spends hundreds of millions annually on data centre usage. The projects are designed to meet rising demands for computational power required for AI applications, including drone swarms, advanced simulations, and real-time operational analysis.

Both Driscoll and Fitzgerald indicated that similar partnerships with private capital firms are likely to expand in the future, aiming to develop the army’s domestic computing infrastructure while building capabilities that could be replicated globally. The army is particularly focused on establishing computing capacity in the Indo-Pacific region within the current presidential term.