Babcock & Wilcox Strengthens Entry into AI Data Center Power Market, Signs $1.5 Billion Agreement with Applied Digital for One-Gigawatt Power Project
Babcock & Wilcox Enterprises, Inc. (B&W) (NYSE: BW) today announced a major advancement in its strategic expansion into the rapidly growing artificial intelligence (AI) data center power generation sector. The company has unveiled its latest initiative—a one-gigawatt (GW) power generation project leveraging B&W’s proven steam generation and turbine technology to deliver highly efficient, reliable, and scalable energy to data centers.
The project, valued at more than $1.5 billion, marks a significant milestone for B&W as it continues to position itself at the forefront of the evolving digital infrastructure power landscape. The company has entered into a Limited Notice to Proceed (LNTP) agreement with Applied Digital Corporation (NASDAQ: APLD), a leader in next-generation digital infrastructure for AI and high-performance computing (HPC). The full contract is expected to be executed in the first quarter of 2026, with operations projected to commence in 2028.
Delivering Reliable Power for the AI Era
As global demand for data processing and AI computation continues to surge, the need for resilient, efficient, and scalable power generation has never been greater. B&W’s latest initiative directly addresses this demand by providing an energy solution that combines the company’s decades of engineering excellence with a faster deployment timeline than traditional simple-cycle gas turbine plants.
B&W will design and install four natural gas-fired power units, each rated at approximately 300 megawatts (MW), for a total capacity of one gigawatt. Each unit will utilize proven B&W boiler systems paired with advanced steam turbine technology, optimized for efficiency, availability, and ease of maintenance. This configuration allows for modular deployment—an increasingly valuable advantage in meeting the rapid expansion timelines of AI data center infrastructure.
By leveraging available and established technology, B&W’s solution minimizes the permitting, procurement, and construction delays that often accompany newer or untested technologies. Compared to conventional simple-cycle systems, B&W’s approach achieves comparable efficiency with shorter lead times, ensuring a quicker path to power delivery and revenue generation.
The facility will be constructed to support Applied Digital’s AI Factory, one of the largest planned power projects for data infrastructure in North America. Once completed, the power plant will play a crucial role in ensuring stable, high-capacity energy supply for AI and high-performance computing workloads.
A Partnership Built on Innovation and Experience
B&W’s collaboration with Applied Digital underscores the alignment between traditional power engineering expertise and modern digital infrastructure requirements. The partnership represents a strategic step in bridging the gap between industrial-scale energy systems and next-generation computing facilities.
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 power generation online.”
Cummins emphasized that as AI workloads grow exponentially, data centers face unprecedented challenges in energy availability, reliability, and sustainability. B&W’s technology not only meets these challenges but does so using a proven, scalable approach.
For Applied Digital, partnering with B&W means we can deploy more capacity faster and more reliably,” Cummins continued. “That’s a crucial competitive advantage in an environment where timing and efficiency directly impact performance and profitability.”
Proven Expertise in Large-Scale Power Solutions
With nearly 160 years of innovation in energy technology,Babcock & Wilcox are designed and installed thousands of boiler systems worldwide, accounting for more than 400 gigawatts of installed generating capacity at utility and industrial facilities. This global experience positions B&W as one of the most trusted and experienced partners in the power generation industry.
Our solutions for AI data centers are proven technologies that utilize natural gas efficiently while providing reliable, redundant, and readily available power faster than combined-cycle or simple-cycle plants,” said Kenneth Young, B&W Chairman and Chief Executive Officer. “This approach leverages the core strengths Babcock & Wilco of represents an ideal solution to power data centers.”
Young highlighted that the company’s engineering and project management capabilities are key differentiators. “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,” he said. “Our proven track record, as well as our broad experience in power plant operations and maintenance, will help assure a completely integrated, seamless solution for our customer from start to finish.”
Shorter Time to Market, Greater Efficiency
In an industry where the speed of deployment can make the difference between success and delay, B&W’s steam generation approach stands out. Traditional simple-cycle gas turbine plants often face longer procurement, construction, and commissioning timelines due to the complexity of turbine manufacturing and global supply constraints.
B&W’s boiler and steam turbine-based configuration, by contrast, relies on readily available components and established supply chains. This enables accelerated project schedules while maintaining efficiency that rivals simple-cycle designs.
The company’s approach offers several key advantages:
- Reduced Lead Time: Shorter design and construction phases allow for faster commissioning and grid connection.
- Operational Flexibility: Steam generation systems can ramp up and down quickly to match fluctuating load demands typical of AI computing environments.
- Reliability and Redundancy: Modular plant design enhances system resilience, allowing continued operation even during partial outages.
- Lifecycle Value: With integrated parts and services support, B&W ensures long-term operational efficiency and maintenance continuity.
Through this model, B&W provides customers like Applied Digital with a balanced blend of reliability, scalability, and cost efficiency, addressing both immediate operational needs and long-term infrastructure goals.
Powering the Future of Data and AI
As AI-driven technologies reshape industries—from finance and healthcare to autonomous vehicles and generative applications—data centers are evolving into critical infrastructure hubs. This evolution demands unprecedented energy capacity, and the global race to supply it is intensifying.
By entering this market, B&W is leveraging its legacy in energy innovation to address one of the defining challenges of the AI era: sustainable, high-performance, and quickly deployable power solutions.
Artificial intelligence has created a new paradigm for energy demand,” said Young. “As companies like Applied Digital build the infrastructure to support next-generation AI computing, the availability of efficient and reliable power becomes the key enabler. B&W’s technology offers a proven path to meet that need—faster, cleaner, and with the dependability that data-driven industries require.”
A Strategic Milestone for Babcock & Wilcox
This agreement represents a cornerstone project in B&W’s strategy to diversify its portfolio and expand into fast-growing sectors such as data centers, renewable energy, and industrial decarbonization.
By combining traditional power generation expertise with cutting-edge digital infrastructure applications, B&W aims to become a preferred partner for companies developing AI-driven facilities worldwide.
In addition to designing and building the four 300-MW natural gas units, B&W anticipates entering into a long-term parts and services agreement to support the plant throughout its operational life. This ongoing collaboration will ensure consistent performance, optimization, and reliability over decades of service.
This project is more than just another installation,” Young concluded. “It represents the convergence of power generation heritage and digital innovation. B&W is proud to be helping shape the future of how AI data centers are powered—efficiently, reliably, and responsibly.”
About Babcock & Wilcox
Headquartered in Akron, Ohio,Babcock & Wilcox Enterprises, Inc. is a leader in energy and environmental products and services for power and industrial markets worldwide.
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