U.S. Army selects Carlyle and CyrusOne to build AI data centers on bases

The US Army Selected Carlyle and CyrusOne to Build AI Data Centers on Military Bases

The US Army has launched an unusual scheme at the intersection of defense, infrastructure, and AI: rather than pursuing a traditional budget-based construction project, it is attracting private capital to create large data centers directly on its bases. The first conditionally selected partners have already been named — Carlyle and CyrusOne.

Who Got the Projects

The US Army announced that it has conditionally selected two companies for exclusive negotiations to build and operate commercial hyperscale data centers on military facilities. Carlyle was granted the right to discuss a project on the territory of Fort Bliss in Texas — approximately 1,384 acres are under consideration. CyrusOne, owned by funds managed by KKR and BlackRock, was selected for a project at Dugway Proving Ground in Utah, where approximately 1,201 acres are being considered for development.

The reason is obvious: the military requires increasingly more computing power for systems based on artificial intelligence. It is important to note that this is not yet a final contract, but only a transition to an exclusive negotiation phase. The Army emphasizes separately that this concerns land that is underutilized but not considered excess, and the model itself is being formalized through the Enhanced Use Lease program.

This is a legal mechanism that allows the military department to lease such parcels without losing control over them. In other words, the Army is not selling off territory, but attempting to turn it into platforms for strategic digital infrastructure.

How the Scheme Works

The key idea is that the private partner bears the main burden. The selected companies must not only invest money in the project, but also go through the entire lifecycle of the facility: from design and construction to operation, maintenance, and subsequent decommissioning. For the Army, this is a way to accelerate the launch of capacity without the traditionally lengthy cycle of government construction and without upfront costs for taxpayers. The Army Corps of Engineers also participates in the project, negotiating leases and providing technical support, including environmental assessments.

• Private companies finance, build, and manage facilities
• The Army retains land ownership rights
• Initial operational capability at Fort Bliss is scheduled for fiscal year 2027
• Dugway Proving Ground is expected to achieve initial readiness in fiscal year 2029
• Environmental review and lease agreement finalization are required before operations begin

An additional argument for the Army is economic. The department expects that such a scheme will not only bring new computing capacity, but also significant private investment, jobs, and income that can be directed toward other Army priorities, including residential infrastructure for military personnel. The published materials also specifically address the load on local networks: water and power supply systems for the sites must be designed to minimize pressure on public utilities around the bases.

Why the Army Needs AI Computing Power

In the rhetoric of the Pentagon and the Army itself, computing infrastructure is no longer presented as an auxiliary IT layer, but as an element of combat capability. According to Army Secretary Dan Driscoll, artificial intelligence has become a strategic asset and force multiplier for the Army. The practical meaning of this thesis lies in the ability to more quickly deploy systems for data analysis, autonomous platforms, drone swarms, and new command and control loops. The closer such capacity is to the customer and the easier it is to scale, the faster the military can translate AI from pilots into practical tools.

"AI is a strategic asset for the Army.

These data centers are a critical resource for this mission."

It is particularly notable that the project is linked to the White House's 2025 executive order accelerating federal permits for data center infrastructure. This means the story is not limited to two sites in Texas and Utah. At the federal level, a broader logic is being formed: if AI is becoming the basis of competitiveness and national security, then one must build not only models, but also the physical infrastructure for their operation. The Army in this scheme acts not only as a customer, but also as an anchor partner for major players in the digital and energy sectors.

What This Means

The news is important not only for the defense sector. It shows that computing capacity for AI is gradually becoming such a basic infrastructure as airfields, warehouses, or power grids. If the model with Carlyle and CyrusOne works out, the US Army will gain a fast path to new capacity, and the market will receive another signal that the next stage of the AI race will proceed not only in laboratories, but on the ground, through construction, energy, and long-term lease agreements.