Overview
- Applied Digital has a $2.4 billion design-build deal with Babcock & Wilcox for 1.2 GW of packaged natural-gas boiler and steam turbine capacity and Siemens Energy agreed to supply 1 GW of 50 MW turbine-generator sets, with the developer planning the first unit to enter service in late 2028.
- The move responds to multi-year backlogs for large-frame gas turbines that industry leaders say could push deliveries into the early 2030s and make waiting for turbines infeasible for AI campuses.
- Packaged boilers are factory assembled and shipped as modules to cut delivery and site time to roughly a year, and vendors say these systems can match the peak-hour efficiency of some gas turbines while providing dispatchable baseload power.
- Utilities and consultants warn the surge in AI projects is straining the grid, with surveys flagging available generation, transmission, and substation capacity as top obstacles and analyst counts showing thousands of interconnection requests totaling well over a thousand gigawatts.
- Expect developers to run their own plants and expand local gas infrastructure now while planning combined-cycle conversions later to capture higher efficiency, a shift that could speed AI buildout but raise local operational and emissions questions as tens of gigawatts of new capacity are projected by 2030.