DOE announces $100B Paducah AI campus with 2GW gas generation

The U.S. Department of Energy has announced a partnership to turn portions of its Paducah Site in western Kentucky into a massive artificial intelligence and high-performance computing campus backed by new power infrastructure, in a project the agency said would involve more than $100 billion in private investment.

According to the DOE announcement dated July 29, the redevelopment is expected to create approximately 8,000 construction jobs and 600 permanent jobs, with construction targeted for completion in 2031.

At the center of the plan is a 1.8-gigawatt data center campus paired with 2 gigawatts of new grid-connected natural gas-fired generation, transmission upgrades and up to 2.6 gigawatts of battery storage. DOE said NextEra Energy plans to develop the power facilities at or near the campus.

Former federal site targeted for AI expansion

The Paducah Site was originally built in 1952 as the Paducah Gaseous Diffusion Plant to produce enriched uranium, first for the nation’s nuclear weapons program and later for commercial nuclear power plants, according to the DOE. The department now owns the plant and oversees environmental cleanup, including remediation, waste management, depleted uranium conversion, and decontamination and decommissioning.

Commercial enrichment at the site continued under lease from 1993 until operations ended in 2013, when the facilities returned to DOE’s Environmental Management program.

DOE said the location offers several features that data center developers seek, including existing transmission capacity, water infrastructure, fiber connectivity and available land. The Paducah effort also builds on the department’s partnership model at the Portsmouth Site as part of its American Energy Hubs initiative for redeveloping former federal sites.

Power buildout would exceed campus demand

DOE said the planned generation and storage would provide more capacity than the data center itself requires. Under the administration’s Ratepayer Protection Pledge, excess electricity could be sent to the regional grid, potentially increasing regional supply.

The broader construction scope extends beyond the computing buildings and includes heavy civil, electrical, utility, energy, battery storage, transmission and mission-critical work. Final procurement and construction packages, however, have not been announced.

Community pressure and policy hurdles remain

The project still faces several hurdles before major work can proceed. The power service agreement must be approved by the Kentucky Public Service Commission, a step DOE identified as key before the partnership can move into engineering, permitting, procurement and construction.

ConstructConnect Associate Economist Devin Bell said, "Public pushback is becoming a real factor in where data centers are being built, in a similar manner to power and water availability. We've already seen this culminate in states like Texas and New York conducting audits or enacting moratoriums on data center construction, along with recent federal legislation."

Bell added, "The 'No AI Data Centers on Federal Lands Act' would ban the use of federal land for data center construction, which would stop the Paducah project in its tracks. Though the bill has little chance of becoming law according to GovTrack.us, it highlights the rising importance of public opinion in data center site selection."

Partnership structure

DOE selected Brookfield to develop and operate the Paducah data center campus after issuing a request for offers in November 2025. NextEra Energy was selected to build and own the dedicated energy infrastructure. Big Rivers Electric is expected to provide wholesale service, Jackson Purchase Energy Cooperative retail service and Paducah Power System community support.

If it moves forward as planned, the Paducah project would add western Kentucky to a growing list of AI developments that combine computing facilities with new power generation and grid infrastructure.

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