Babcock & Wilcox Unveils AI Data Center Power Deal with Applied Digital
Babcock & Wilcox (B&W) (NYSE: BW), a global leader in energy and environmental technologies, announced a major step forward in its expansion into the rapidly growing artificial intelligence (AI) data center power generation market. The company revealed plans to deliver more than one gigawatt (GW) of electricity to an Applied Digital (NASDAQ: APLD) AI Factory through an innovative natural gas-based steam generation solution that promises greater efficiency and a faster time to market compared to traditional simple-cycle power plants.
As part of this initiative, B&W has received a limited notice to proceed (LNTP) for the project, which is valued at more than $1.5 billion. The full contract is expected to be finalized and released in the first quarter of 2026, marking one of the most significant developments to date in the company’s growing portfolio of clean and efficient power generation projects tailored for the AI and digital infrastructure sectors.
Accelerating Power Delivery for AI Infrastructure
Under the agreement, B&W will design and install four natural gas-fired power plants, each with a capacity of approximately 300 megawatts (MW). The plants will utilize proven boiler and steam turbine technologies, forming an integrated system capable of meeting the massive energy demands of next-generation AI data centers. The combined one-gigawatt facility is expected to commence operations by 2028, offering reliable, flexible, and scalable power supply to support Applied Digital’s expanding AI infrastructure footprint.
Beyond construction and installation, B&W anticipates signing a long-term parts and services agreement to support ongoing operations and maintenance once the plant achieves commercial operation. This aligns with the company’s strategy of providing complete lifecycle solutions that ensure reliability, efficiency, and continuous support for its customers.
Partnering for Innovation and Speed
Applied Digital’s Chairman and Chief Executive Officer, Wes Cummins, emphasized the importance of the partnership in meeting the growing energy requirements of the AI revolution. “We’re proud to partner with B&W, a company with nearly 160 years of proven leadership in power generation,” Cummins stated. “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 highlighted that B&W’s approach provides a critical edge in a market where energy infrastructure must keep pace with the exponential growth of artificial intelligence applications. AI computing facilities—especially those focused on machine learning, data processing, and high-performance cloud computing—require uninterrupted power delivery and high energy density. B&W’s proven steam-based technology offers both reliability and scalability, crucial attributes for data centers operating at global scale.
Proven Technology Meets Modern Demand
B&W Chairman and Chief Executive Officer Kenneth Young underscored the company’s deep experience and technological strength as key enablers of this landmark project. “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,” Young said. “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. This approach leverages the core strengths of Babcock & Wilcox and represents an ideal solution to power data centers.”
Young added that B&W’s steam generation approach brings a unique combination of speed, reliability, and cost-effectiveness. While simple-cycle gas turbines are often used for quick power delivery, they typically involve long lead times and extensive permitting processes. In contrast, B&W’s boiler and steam turbine systems can be deployed faster, offering a significant advantage in a market that is under increasing pressure to supply large-scale power for AI and cloud computing operations.
A Global Legacy of Power Excellence
Babcock & Wilcox’s legacy in power generation spans nearly 160 years, with a history of delivering advanced energy technologies across sectors including utilities, industry, and environmental management. The company’s portfolio includes extensive expertise in engineering, technology integration, construction, and project management. This experience has been developed through decades of executing large-scale power projects around the world, many of which have set benchmarks for reliability and performance.
“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,” Young emphasized. “B&W’s combination of engineering know-how, project execution capability, and operational support provides customers like Applied Digital with confidence that their critical energy infrastructure will perform as expected—on time and on budget.”
Powering the AI Era
The collaboration between B&W and Applied Digital underscores a broader shift in the global energy landscape. As artificial intelligence systems evolve, their computational needs are driving exponential increases in power consumption. AI data centers—often referred to as AI factories—require not only vast amounts of energy but also stability and scalability to support continuous 24/7 operation.
B&W’s natural gas-fired steam technology offers a practical bridge between today’s conventional generation and tomorrow’s clean, efficient energy future. It provides a low-emission, high-availability solution capable of powering large-scale digital infrastructure while paving the way for integration with renewable or hybrid systems in the future.
This project also signals B&W’s intent to become a major player in the AI-driven power market, a fast-emerging segment within the broader energy transition. By combining its proven technology base with flexible deployment and operational expertise, B&W is positioning itself as a go-to partner for data center operators, hyperscalers, and technology firms seeking fast, dependable, and efficient power solutions.
As the world continues to digitize and artificial intelligence applications expand across industries, the demand for secure and scalable power solutions will only intensify. The partnership between Babcock & Wilcox and Applied Digital demonstrates how traditional power technology leaders can adapt to meet the energy needs of the digital age—delivering both innovation and reliability for the future of AI.
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