US energy technology provider Babcock & Wilcox (B&W) has signed an agreement with data center developer Applied Digital to supply it with more than 1GW of natural gas power.

B&W secured a limited notice to proceed on the $1.5 billion project, which will see the company build four 300MW natural gas-fired plants to power an Applied Digital AI data center.

The full contract is expected in Q1 2026, with operations slated to begin in 2028. The company also expects to sign a long-term parts and services agreement once the plant becomes operational. The exact data center that the power plants will serve was not disclosed.

“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 CEO 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.”

B&W claims that its steam-based generation systems can be deployed faster than traditional simple- or combined-cycle gas plants, offering an alternative for AI data centers facing power constraints.

“B&W has designed and installed thousands of boilers and has more than 400GW of installed generating capacity at utility and industrial plants around the world,” said Kenneth Young, B&W chairman and CEO.

“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.”

Young went on to state that the company’s experience in engineering, construction, and project management will support the “fully integrated” delivery. The company also said that it expects to sign a long-term parts and services agreement once the plant becomes operational.

“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,” said Young. “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.”

B&W, based in Ohio, has been expanding its focus toward data center energy solutions as part of its broader growth strategy in emerging power markets. In September, the company partnered with energy transition investment firm Denham Capital to convert former coal-fired power plants into natural gas-fired plants to power data centers in the US and Europe.

Applied Digital is a developer of AI and HPC data centers in the US. Last month, the firm made the first 50MW phase of its Ellendale, North Dakota, data center ready for service. The capacity has been leased out to CoreWeave, which inked a 400MW capacity agreement with the company.

Construction on Applied’s Polaris Forge 1 campus in Ellendale began in September 2022 as crypto and HPC development. The site was designed to host 400MW of critical IT load, with the company claiming it has more than 1GW of power capacity currently under various stages of load study.