What happened
Applied Digital announced that its Delta Forge 2 project will be a $3.2 billion AI data center campus in Brookwood, Alabama. The facility is planned for 160 acres with 1.26 million square feet of space, featuring a 210-megawatt critical IT load lease with an unnamed U.S. hyperscale company. Construction is scheduled to begin October 1, 2026, with completion expected by December 31, 2028.
Applied Digital, a Dallas-based company, announced on Thursday that its previously announced Delta Forge 2 project will be located in Brookwood, Alabama. The project represents an initial capital investment of $3.2865 billion, according to a project fact sheet from the Tuscaloosa County Industrial Development Authority.
The campus will occupy approximately 160 acres of a nearly 1,300-acre site north of the 17,000 block of Brookwood Parkway. It is expected to include approximately 1.26 million square feet of data center space. Applied Digital stated that the facility will host a 210-megawatt critical IT load lease with a U.S.-based hyperscale company, though the specific tenant was not named in the report.
Construction is scheduled to begin on October 1, 2026, with completion expected by December 31, 2028. During the construction phase, employment is expected to peak at more than 1,000 workers. Once operational, the facility is projected to support 101 full-time positions, with an estimated $129.5 million in payroll over 20 years.
The project includes significant financial commitments to the local community. Applied Digital has committed $270 million in community benefit payments to the Tuscaloosa County Economic Development Authority over 20 years. Additionally, the project is projected to generate approximately $170.7 million in taxes paid, while receiving approximately $314.5 million in total tax abatements. The combined taxes paid and community benefit payments are estimated to total approximately $440.7 million over the 20-year period.
Why it matters
This announcement represents a significant expansion of AI infrastructure in the U.S. Southeast, adding to the growing network of large-scale data centers designed to support high-demand AI workloads. The project highlights the continued capital investment in physical AI infrastructure, with substantial local economic impacts including construction jobs, long-term tax revenues, and community benefit payments. It also underscores the strategic importance of power capacity and geographic diversification for AI providers.
The announcement signals a major commitment to AI infrastructure in Alabama, a region increasingly becoming a hub for data center development due to favorable energy costs and tax incentives. The 210-megawatt critical IT load indicates a facility designed for high-density computing, likely supporting large-scale AI training or workloads.
The involvement of a U.S.-based hyperscale company, though unnamed, suggests that the facility will serve major cloud providers or AI developers requiring substantial resources. This aligns with broader industry trends of securing long-term leases for AI-specific data centers to meet growing demand.
The economic impact on Brookwood and Tuscaloosa County is substantial, with the project expected to become the largest taxpayer in Brookwood's history. The combination of tax abatements and community benefit payments is designed to offset the loss of tax revenue during the abatement period and provide long-term financial support to local entities.
This project is part of Applied Digital's broader AI Factory platform, which includes five campuses with approximately 1.4 gigawatts of critical IT load under long-term lease agreements. The expansion reflects the company's strategy to build a distributed network of AI-focused data centers across multiple markets.
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What to watch next
Monitor the identity of the unnamed hyperscale tenant, as this will clarify the specific AI workloads hosted. Watch for construction milestones and any local regulatory or community responses to the large-scale development. Additionally, track Applied Digital's broader portfolio expansion across its five AI Factory campuses.
The identity of the U.S.-based hyperscale company leasing the 210-megawatt critical IT load is a key unknown. Revealing the tenant will provide insight into the specific AI applications or models that will be hosted at the facility.
Construction progress and any potential delays or regulatory hurdles should be monitored, as large-scale data center projects often face challenges related to permitting, power grid connections, and community opposition.
The long-term economic impact on Brookwood and Tuscaloosa County, including the actual number of jobs created and the financial benefits to local schools and public services, will be important to track over the next several years.
Applied Digital's broader portfolio expansion and the performance of its other AI Factory campuses will be relevant to assessing the company's overall strategy and the viability of its AI infrastructure model.