US Army Selects Carlyle, CyrusOne for Major Data Center Projects on Military Bases
March 26, 2026
In a significant move to modernize its digital infrastructure and harness artificial intelligence, the U.S. Army has conditionally selected global investment firm Carlyle and data center operator CyrusOne to develop large-scale data centers on Army-owned land. The initiative underscores the military's strategic pivot towards leveraging private sector expertise and capital to build the computational backbone required for next-generation warfare and resilience.
The Army announced that Carlyle will develop a data center project on approximately 1,384 acres at Fort Bliss in Texas, while CyrusOne, owned by investment giants KKR and BlackRock, will develop 1,201 acres at the Dugway Proving Ground in Utah. The selections followed what the Army described as a "rigorous and competitive process." Under the proposed arrangement, the companies will be responsible for the full lifecycle of the facilities—financing, construction, operation, maintenance, and eventual decommissioning—with no upfront cost to taxpayers.
“AI is a strategic asset for the army,” said Secretary of the Army Dan Driscoll. “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.” David R. Fitzgerald, Deputy Undersecretary of the Army, added, “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.”
The projects are facilitated by a 2025 White House executive order, "Accelerating Federal Permitting of Data Center Infrastructure," which allows military departments to lease non-excess property. The order mandates that such projects involve at least $500 million in capital expenditure and offer more than 100MW of capacity. The Army clarified that the deal is not yet final and is currently in an exclusive negotiation period to finalize lease terms. Preliminary timelines suggest the Carlyle site at Fort Bliss could be operational by 2027, with the CyrusOne site at Dugway targeting a 2029 launch.
Ferris Hussein, a partner in global infrastructure at Carlyle, stated, “We are pleased to have been selected to enter exclusive negotiations with the US Army on this initiative to advance next-generation digital infrastructure. With deep roots in Washington, DC, 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.” Eric Schwartz, CEO of CyrusOne, said, “We are honored to be selected by the US Army... This represents a unique opportunity to support the army’s modernization objectives through a long-term, commercially driven development.”
The Dugway Proving Ground, spanning about 2,634 square miles southwest of Salt Lake City, would mark CyrusOne's first entry into the Utah market. Fort Bliss in Texas covers approximately 1,699 square miles. This Army initiative is part of a broader federal trend. In late 2025, the Department of Energy issued requests for proposals for similar large-scale data center projects at the Savannah River Site in South Carolina and within the 33,508-acre Oak Ridge Reservation, indicating a concerted government-wide effort to rapidly expand secure, high-capacity computing infrastructure.
Source: datacenterdynamics
