Utah’s empty high desert could soon be hosting some very crowded servers.
The U.S. Army has conditionally picked Dugway Proving Ground in Tooele County to enter exclusive negotiations with data‑center operator CyrusOne for a hyperscale computing campus expected to sprawl across roughly 1,200 acres. The plan is paired with a similar selection of Fort Bliss, Texas, as part of a two‑site push to lock in more artificial‑intelligence computing capacity for the service.
So far, this is all still on paper. Officials say no lease has been signed, no construction contract inked, and the Army and the companies will now try to hammer out terms.
What the Army Announced
In a March 26 release, the Army said it had “conditionally selected” global investment firm Carlyle for Fort Bliss and CyrusOne for Dugway. Under the plan, those firms would finance, build, operate, maintain, and eventually decommission the data centers under long‑term leases.
The Army describes the effort as part of its Enhanced Use Lease program and stresses that the projects are structured to carry no upfront taxpayer cost, according to the Army. The same release projects Initial Operating Capability at Fort Bliss in fiscal year 2027 and at Dugway in fiscal year 2029.
Who’s Been Tapped and What They’d Build
CyrusOne, a data‑center operator whose ownership includes funds managed by KKR and BlackRock, is the company named to enter exclusive talks for the Dugway parcel. The Army and published coverage put the site at about 1,200 acres, while industry outlets highlight CyrusOne statements welcoming the chance to work with the Army, according to DataCenterDynamics.
The Army’s announcement says developers will be responsible for designing on‑site power and water solutions. In return, the service would lock in a percentage of the data‑center capacity for its own use.
Why the Army Says It Needs the Capacity
The Army is pitching the program as an answer to surging demand for AI computing power, calling artificial intelligence “a strategic asset” that depends on resilient, high‑capacity infrastructure. Industry coverage notes that the projects are being designed with massive on‑base power and water systems to match both military and commercial demand, according to Bisnow.
Fort Bliss is expected to be the larger of the two sites and to include on‑site power generation and closed‑loop water systems. Across both locations, officials say the Enhanced Use Lease model lets the Army tap private capital instead of paying for the giant buildings directly.
Local Questions: Energy, Water and Access
In Tooele County, the big questions are already obvious: where the extra power and water would come from, how construction would unfold, and what long‑term operations would mean for the remote high desert community.
State leaders are simultaneously weighing other large energy concepts in the same broad region, including a proposal to host a federal nuclear lifecycle campus. Those ideas could overlap with infrastructure needs at Dugway, per reporting from KSL.
Developers say the data centers are being planned with integrated power solutions and closed water systems, but environmental reviews and direct community input are still ahead, not behind.
Next Steps and the Long Road to Groundbreaking
The conditional selections kick off an exclusive negotiation period to finalize lease terms, complete environmental studies, and nail down force‑protection measures. The Army says the U.S. Army Corps of Engineers will provide technical expertise during those talks.
Defense and industry outlets note that the deals rely on long‑term private capital and that many of the messy details remain open, including revenue sharing, construction schedules and permitting timelines. Observers expect negotiations, permitting, and community review to dominate the coming months, according to Breaking Defense.
Legal Authority and Oversight
The Army is leaning on its Enhanced Use Lease authority under Title 10 U.S.C. § 2667, which allows the military departments to lease non‑excess property when doing so “promotes the national defense or is in the public interest” and sets rules for lease terms and consideration. That statute lays out evaluation procedures and gives the service flexibility to structure long‑term leases while retaining certain revocation and oversight rights. The Army cited that legal footing explicitly in its announcement. See the statute text at Title 10 U.S. Code § 2667.
What comes next is straightforward to list and complicated to execute: whether exclusive talks result in a signed lease, what environmental reviews find, and how Dugway’s energy and water plans evolve to support a gigawatt‑scale campus. For the Army, the move is a significant step toward shoring up domestic AI infrastructure. For Tooele County, the real story will be written in the fine print on local infrastructure, environmental safeguards, and how much say nearby communities actually get before the servers show up.
