Babcock & Wilcox secures $1.5 billion power project for AI data center

AKRON - Babcock & Wilcox (NYSE:BW) has entered into an agreement for a limited notice to proceed on a project valued at over $1.5 billion to deliver one gigawatt of power for an Applied Digital (NASDAQ:APLD) AI facility, according to a company press release.

The project involves designing and installing four 300-megawatt natural gas-fired power plants with boilers and steam turbines. The plant is scheduled to begin operation in 2028, with the full contract release anticipated in the first quarter of 2026. This significant infrastructure investment comes as analysts forecast Applied Digital’s revenue to grow by 114% in fiscal year 2026, according to InvestingPro data, though the company is not expected to be profitable this year.

"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, adding that B&W’s technology enables faster deployment compared to alternatives they evaluated.

Kenneth Young, B&W Chairman and Chief Executive Officer, stated that the company’s solutions for AI data centers utilize natural gas efficiently while providing reliable power faster than combined-cycle or simple-cycle plants.

B&W plans to leverage its engineering, technology, construction and project management expertise for the implementation. The company also expects to sign an ongoing parts and services contract to support the facility once commercial operation begins.

The Akron, Ohio-based company has designed and installed thousands of boilers and has more than 400 gigawatts of installed generating capacity at utility and industrial plants globally.

The announcement represents B&W’s entry into the AI data center power supply market using steam generation technology that the company claims offers shorter time to market than traditional power plants.

In other recent news, Applied Digital has completed the first phase of its Polaris Forge 1 AI Factory Campus in North Dakota. This phase involves a 50-megawatt deployment, part of a larger 400-megawatt project under a 15-year lease agreement with CoreWeave, expected to generate approximately $11 billion in lease revenue. Additionally, Applied Digital announced a significant lease deal with a U.S.-based hyperscaler at its Polaris Forge 2 campus, involving 200 megawatts of IT capacity and projected to bring in about $5 billion in revenue over 15 years. The hyperscaler also has the option to expand by an additional 800 megawatts.

In a separate development, Applied Digital amended its Series G Convertible Preferred Stock terms, raising the minimum conversion price floor from $22.00 to $34.00. This amendment was filed with the Secretary of State of Nevada. Furthermore, H.C. Wainwright has raised its price target for Applied Blockchain to $40 from $20 while maintaining a Buy rating, following the company’s first quarter fiscal 2026 results. These developments highlight the company’s ongoing growth and strategic moves in the AI and data center sectors.

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