Army Taps Carlyle, CyrusOne for Hyperscale Data Centers at Fort Bliss and Dugway in AI-Driven Modernization Push

Enhanced Use Lease program advances commercial-military partnerships as the U.S. Army accelerates AI, cloud, and resilient infrastructure under directive from Donald Trump

In a significant step toward digital modernization, the U.S. Army has selected The Carlyle Group and CyrusOne to develop and operate large-scale commercial data centers at Fort Bliss and Dugway Proving Ground, respectively.

The initiative, announced Thursday, is being executed through the Army’s Enhanced Use Lease (EUL) program—an increasingly strategic mechanism allowing private-sector investment on underutilized military land. The move follows an executive order issued by Donald Trump directing federal agencies to fast-track data infrastructure critical to national security, artificial intelligence, and economic competitiveness.

Under the plan, Carlyle has been conditionally selected to develop a hyperscale data center at Fort Bliss, spanning approximately 1,384 acres, with initial operating capability projected for fiscal year 2027. Meanwhile, CyrusOne will pursue a similar development at Dugway Proving Ground, covering roughly 1,201 acres and targeting operational readiness by fiscal year 2029.

Army leadership framed the effort as central to its evolving warfighting doctrine. “AI is a strategic asset for the Army,” said Secretary of the Army Dan Driscoll, emphasizing its role as a force multiplier and enabler of next-generation capabilities. “These data centers are a critical resource to support that strategic imperative.”

The projects are expected to operate under long-term lease agreements—potentially extending up to 50 years—while placing financial responsibility on the private developers. According to Army officials, the companies will handle the full lifecycle of the facilities, including financing, construction, operations, and eventual decommissioning, with no upfront cost to taxpayers.

A key feature of the initiative is the integration of “behind-the-meter” energy and water infrastructure. This approach is designed to ensure operational continuity without placing additional strain on local utilities—a growing concern as hyperscale data centers increasingly face scrutiny for their high consumption of electricity and water resources.

The Army Corps of Engineers will conduct environmental reviews for both sites, a necessary step given the scale and potential ecological impact of the developments. Data center expansion has drawn political and community opposition nationwide, particularly in regions concerned about grid reliability and emissions.

Despite these concerns, industry leaders view the partnership as a pivotal opportunity. CyrusOne CEO Eric Schwartz described the initiative as a “unique opportunity to support the Army’s modernization objectives through a long-term, commercially driven development.” Carlyle partner Ferris Hussein echoed that sentiment, highlighting the role of advanced digital infrastructure in enabling scalable, secure military capabilities.

The Army had also evaluated additional installations, including Fort Hood in Texas and Fort Bragg in North Carolina, as potential candidates for similar developments—signaling broader ambitions to expand digital infrastructure across the force.

As the Pentagon intensifies its focus on artificial intelligence, cloud computing, and resilient networks, the collaboration between the military and private sector is emerging as a cornerstone of defense strategy—blurring the lines between commercial innovation and national security imperatives.

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-- By James W. Thomas

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