Cheyenne is about to get its largest data center yet, with pipeline company Tallgrass and Texas-based digital-infrastructure company Crusoe announcing the construction of a 1.8-gigawatt artificial intelligence (AI) data center in southeast Wyoming.
While the two companies did not provide a precise location, Mayor Patrick Collins confirmed with Cowboy State Daily that it will be in Cheyenne.
Collins said Cheyenne didn’t seek out the opportunity to be home to the massive data center. It came knocking.
“We don’t advertise or market to data centers anymore,” he said. “They come to us. We have so many that I think they’re just curious about what the heck is going on in Wyoming.”
It doesn’t take long for data center companies to see that Cheyenne has what they need, Collins said. There’s land, access to fiber optics and a utility company that’s willing to innovate.
“In this case, we won’t need the power from Black Hills,” Collins said. “But (often) Black Hills has to help them take power from that power plant to the system to get it to those data centers.”
The cooperation of Black Hills Energy has been key to Cheyenne’s success with data centers, Collins added.
“You have to have somebody like Black Hills to make this work,” he said.
Center Will Scale To 10 Gigawatts
Crusoe, in its announcement about the 1.8-gigawatt AI data center campus, says its project is designed to scale to 10 gigawatts in all.
A single gigawatt can power a million homes, more homes than Wyoming with its population of 587,618.
To get the enormous amount of power the 1.8-gigawatt center will need, Crusoe plans to use multiple energy sources, including natural gas and renewable energy.
Tallgrass, based in Douglas, meanwhile, will be capturing carbon dioxide and storing it for the company.
“Building an American AI factory that can scale to 10 gigawatts of capacity illustrates Crusoe’s commitment to delivering infrastructure at the scale needed for the U.S. to win the global AI race,” Crusoe CEO and co-founder Chase Lochmiller said in a statement. “Our partnership with Tallgrass will activate the energy needed to power intelligence and drive a massive investment into the American workforce to bring this to life, creating high-quality jobs across construction, manufacturing, technology, energy and transportation.”
Tallgrass CEO Matt Sheehy pointed out his company has called Wyoming home for more than a decade.
“With hundreds of teammates and thousands of miles of pipeline and other large-scale infrastructure across the state, we’re proud of the impact we’ve made in the region — and through collaboration with Crusoe, even more excited for what’s ahead,” he said.
Accelerating American Innovation
Reactions across the state to the Crusoe and Tallgrass announcement have been jubilant.
“This is exciting news for Wyoming and for Wyoming natural gas producers — and it highlights the kind of projects we can achieve through continued trade missions, like our recent visit to Taiwan and Japan,” Gov. Mark Gordon said in a statement. “Crusoe and Tallgrass have been working in Wyoming for years, and Crusoe was featured on ‘60 Minutes’ pioneering new technology.
“It’s great to see that work continue here. I’m looking forward to their joint project becoming a reality.”
U.S. Sen. John Barrasso, R-Wyoming, credited Wyoming’s commitment to innovation for the development.
“Wyoming is pro-business and pro-growth,” he said. “Our commitment to innovation and investment is what makes our state great. New state-of-the-art data centers like this will bring high-paying jobs and a skilled workforce to southeast Wyoming.
“It will also help ensure Wyoming remains at the forefront of technological modernization and advancement.”
U.S. Sen. Cynthia Lummis said it was good to see Wyoming continuing to play a national role in innovations that will be required for national security.
“Wyoming has been at the forefront of American ingenuity pioneering robust energy solutions and powering our nation’s boldest innovators,” she said. “This cutting-edge AI data center will strengthen our nation’s leadership in artificial intelligence, bringing high-quality jobs to Wyoming and solidifying our role as the powerhouse of high-performance computing.”
Putting Wyoming Natural Gas, Renewables To Work
Crusoe and Tallgrass are both companies with great reputations, Cheyenne Chamber of Commerce CEO Dale Steenbergen told Cowboy State Daily, and he’s expecting great things ahead with the construction of this data center.
“Crusoe has, they definitely have the reputation that they can high-velocity put in data centers,” he said. “And Tallgrass has experience with pipelines and carbon sequestration — a bunch of things that will be a good addition to what Crusoe does.”
That the companies will be using natural gas is a boon for the future of Wyoming’s oil and gas industry, Steenbergen said.
“Where they’re at in southeast Wyoming, we’ve been doing some oil production and the natural gas,” he said. “A lot of times, because of pipelines and other things, natural gas gets to be a byproduct.
“And the price of natural gas at Henry Hub gets (so low) we’ve been struggling for years to get a market for natural gas. We produce a lot of natural gas but haven’t had a way to get it sold at a price that really made it worthwhile.”
Henry Hub refers to a marketplace in Texas where oil and gas are traded.
Having a new market for natural gas could be game-changing for Wyoming’s oil and gas industry. A product that’s been so cheap at times it’s treated as waste could begin to have real value.
Petroleum Association of Wyoming Vice President Ryan McConnaughey expects the use of natural gas for data centers to increase, with AI centers chasing every possible molecule for the energy they need.
“Natural gas will play a pivotal role in the advancement in AI and data centers for years to come as a source of clean, reliable, dispatchable energy,” he said. “These industries are growing exponentially, and Wyoming is poised to be an epicenter of that growth thanks in part to the state’s abundant natural resources. Wyoming producers are ready to meet those needs.”
Obstacles To Fully Capture Opportunity
A race is on right now to build out artificial intelligence data centers all over the country and the world. That makes this moment a generational opportunity.
But the state faces challenges when it comes to fully capitalizing on that opportunity.
Wyoming looks great for data center and artificial intelligence companies. Its weather is cooler on average than many other places in the country, and the state produces 15 times more energy than it uses.
The Cowboy State also has a vital, transcontinental fiber line that’s co-located along Union Pacific rights of way, running parallel with Interstate 80.
Data centers have developed all along the I-80 corridor in most states because of that transcontinental fiber line. However, in Wyoming the trend stops at Cheyenne and doesn’t pick back up again until Utah.
The donut hole that’s missing data centers illustrates a big challenge Wyoming faces as it tries to lasso in this new opportunity to not only diversify, but create a new path to the future for its fossil fuels.
The problem has been a lack of power infrastructure for the communities along I-80, Cowboy State Daily has been told previously by officials with the Wyoming Business Council.
Wyoming Business Council’s Wendy Lopez, who is the group’s business recruitment manager, has told Cowboy State Daily she fields many calls from companies that want to build data centers in Wyoming, as well as large-scale manufacturers looking at locations in Wyoming.
But getting the large-scale power they need has been an issue for many of them.
“If you look at any of the communities along I-80 and how much power they’re currently using, it might only be like 20, 50 megawatts worth of power,” she said. “So, their infrastructure is built for that. The wires that are coming in are built for that.”
A project that requires 250 megawatts will require all new infrastructure. That’s made it difficult to expand the data center trend outside of Cheyenne.
Renée Jean can be reached at renee@cowboystatedaily.com.
