Babcock & Wilcox Enters AI Data Center Power Market with $1.5 Billion Agreement to Deliver One Gigawatt of Capacity for Applied Digital
Babcock & Wilcox (B&W) a global leader in energy and environmental technologies, today announced a major step forward in its entry into the rapidly growing AI data center power generation market. Leveraging its proven steam generation technology, B&W will deliver efficient, reliable, and readily deployable power solutions designed specifically to meet the unique energy needs of large-scale artificial intelligence (AI) infrastructure.
As part of this expansion, B&W has signed a Limited Notice to Proceed (LNTP) agreement with Applied Digital Corporation for a project valued at more than $1.5 billion to deliver one gigawatt (1 GW) of electric power for Applied Digital’s new AI Factory. The companies anticipate executing the full contract in the first quarter of 2026, with operations expected to commence in 2028.
Accelerating Power Generation for the AI Era
The project will include the design and installation of four 300-megawatt (MW) natural gas-fired power generation facilities. Each plant will utilize B&W’s proven boiler and steam turbine technology, offering a fast, efficient, and reliable alternative to traditional simple-cycle gas turbines.
B&W’s steam-based approach provides comparable efficiency while enabling significantly shorter deployment timelines—a key advantage in a market where AI data centers must rapidly scale to meet surging demand for computational power.
Once operational, B&W expects to enter into a long-term parts and services agreement to ensure continuous, high-efficiency performance and reliability throughout the facility’s lifecycle.
Partnership Strengthens Applied Digital’s Market Leadership
“We’re proud to partner with B&W, a company with nearly 160 years of proven leadership in power generation,” said Wes Cummins, Chairman and Chief Executive Officer of Applied Digital. “Their advanced boiler and steam turbine technology delivers efficiency on par with the simple-cycle gas turbines we evaluated—while enabling faster deployment. This partnership enhances our ability to add more capacity to current and future sites, giving Applied Digital a distinct speed-to-market advantage in bringing new power generation online.”
Applied Digital’s AI Factory is part of the company’s broader strategy to develop purpose-built infrastructure that supports the expanding needs of AI, high-performance computing (HPC), and data-intensive workloads. Reliable and efficient power generation is critical to these facilities, where downtime or insufficient capacity can significantly impact operational performance.
By leveraging B&W’s technology and decades of experience in complex power systems, Applied Digital aims to ensure its new facility delivers both energy resilience and operational scalability to support next-generation AI applications.
Proven Technology for a New Generation of Power Demands
“B&W has designed and installed thousands of boilers and has more than 400 gigawatts of installed generating capacity at utility and industrial plants around the world,” said Kenneth Young, Chairman and Chief Executive Officer of Babcock & Wilcox. “Our solutions for AI data centers are proven technologies that utilize natural gas efficiently while providing reliable, redundant, and rapidly deployable power—faster than combined-cycle or simple-cycle alternatives.”
Young added that the company’s AI data center solution reflects B&W’s ability to adapt its traditional strengths to emerging industries. “This approach leverages Babcock & Wilcox’s core expertise in steam generation and turbine systems, representing an ideal solution for powering data centers that require both speed and stability.”
With growing demand for high-density computing and the rapid expansion of AI workloads, the need for scalable, secure, and sustainable power infrastructure has never been greater. B&W’s system architecture provides a balance of efficiency, flexibility, and reliability, meeting the stringent uptime and performance standards required by hyperscale AI operations.
Decades of Experience, Fully Integrated Execution
In addition to advanced technology, B&W brings unparalleled engineering, construction, and project management expertise to the table. The company has decades of experience executing large-scale energy projects across the globe—from design and fabrication to commissioning and ongoing maintenance.
“B&W also has extensive engineering, technology, construction, and project management expertise, earned through decades of successfully executing some of the largest power projects in the global market,” Young said. “Our proven track record, combined with deep operational and maintenance experience, will ensure a fully integrated, seamless solution for our customer—from concept through commercial operation.”
The project underscores B&W’s commitment to supporting the digital infrastructure revolution, where data centers—particularly those supporting AI and machine learning—are projected to become one of the world’s largest consumers of electricity. B&W’s power generation solutions help address this challenge with technologies that are efficient, scalable, and ready to deploy on accelerated timelines.
