US Department of Energy announces $100 billion federal partnership to build an AI data center campus and new energy infrastructure at Paducah, Kentucky.
On July 29, 2026, the U.S. Department of Energy announced a partnership with Brookfield, NextEra Energy, Big Rivers Electric Power Corporation, Jackson Purchase Energy Cooperative, and Paducah Power System to redevelop parts of its Paducah Site in Western Kentucky into a major AI data center campus. The project is backed by more than $100 billion in private funding—described as one of the largest investments in Kentucky's history—and is expected to generate roughly 8,000 construction jobs and 600 permanent positions.
Following a formal Request for Offers issued in November 2025, DOE selected Brookfield to develop and operate the data center campus, while NextEra Energy will build and own the dedicated energy infrastructure. The three regional utilities provide wholesale service (Big Rivers Electric Power Corporation), retail distribution (Jackson Purchase Energy Cooperative), and local partnership (Paducah Power System). The power service agreement remains subject to Kentucky Public Service Commission approval.
The Paducah site was chosen for its existing transmission capacity, water infrastructure, fiber connectivity, and available land—a combination that DOE determined uniquely suited it for large-scale AI infrastructure. The project follows DOE's American Energy Hubs initiative model, previously piloted at the Portsmouth site, which has proven how federal, state, local, and private-sector collaboration can accelerate major investment.
NextEra Energy plans to develop 2 GW of new grid-connected natural gas-fired generation at or near the Paducah campus, paired with upgrades to existing transmission infrastructure. The company will also deploy up to 2.6 GW of battery energy storage—both figures exceeding the campus's own consumption of 1.8 GW for AI and high-performance computing workloads. Under DOE's Ratepayer Protection Pledge, excess electricity will flow to the regional grid, reducing energy costs for consumers and businesses across the region.
Construction is targeted for completion by 2031, with approximately 8,000 jobs during build-out and around 600 permanent positions once operational. Local officials, including Congressman Andy Barr (R-KY), voiced strong support, with Barr noting his personal advocacy with Secretary of Energy Chris Wright to secure the project. Beyond employment, the development is expected to boost local tax revenue and deliver lasting economic benefits to Paducah and surrounding communities.
Environmental cleanup at the Paducah Site will continue in parallel with redevelopment. Secretary Wright framed the initiative as central to ensuring the U.S. "wins the AI race" by leveraging federal assets to attract private investment and increase power generation capacity, while Assistant Secretary for Environmental Management Tim Walsh emphasized the goal of returning federal land to productive use.