The U.S. Army has conditionally selected two private companies to enter into exclusive negotiations to build and operate commercial hyperscaled data centers on Army installations in Texas and Utah.
According to the announcement, global investment firm Carlyle was chosen for a project on approximately 1,384 acres at Fort Bliss, Texas, while CyrusOne, a portfolio company jointly held by KKR and BlackRock, was selected for a project on about 1,201 acres at Dugway Proving Ground, Utah.
Both companies will be responsible for financing, constructing, operating, maintaining, and decommissioning the data centers with no upfront cost to taxpayers.
“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,” said David Fitzgerald, deputy undersecretary of the Army. “Our new data center initiatives made possible by enhanced use leasing, are a direct investment in Army priorities.”
The lease agreements will allow the developers to build and operate comprehensive power and water solutions on site to ensure operational continuity, without straining public systems.
Initial operating capability is projected for fiscal year (FY) 2027 at Fort Bliss and FY 2029 at Dugway Proving Ground.
The U.S. Army Corps of Engineers will play a key role in the project. It will conduct lease negotiations and provide technical expertise, including environmental reviews, the Army said.
According to officials, this initiative aligns with the White House’s 2025 executive order on accelerating federal permitting for data center infrastructure. Title 10 U.S. Code § 2667 allows military departments to lease non-excess property.
While the selection is a significant step forward, the deal is not yet final, officials explained. Now, the service and the two companies enter into an exclusive negotiation period to finalize lease and other terms.