Plans to construct a new artificial intelligence data center just outside Cheyenne have the city’s mayor smiling.
The joint venture by Crusoe, a data center development company, and Tallgrass, a company that builds the infrastructure for data centers, is estimated to use 1.8 gigawatts of power, with the ability to scale up in the future. That’s more electricity than what’s used by all the homes in Wyoming combined.
The mayor did not specify specific dollar amounts or job titles, but said the center will provide benefits to the state in the form of tax revenue and quality of jobs.
The forthcoming data center’s announcement brings Cheyenne further into the nationwide scramble for advanced storage, processing and support services required for emerging AI technologies.
Data center city
The state’s capital is no stranger to data centers. Companies Meta and Microsoft already have data centers there.
Cortney Thompson, Chief Information Officer of Lunavi, a company that owns data centers in Cheyenne, said Lunavi is seeing a surge of interest in AI services.
“That’s why we’ve taken proactive steps to ensure that our flagship Cheyenne, Wyoming data center is not only future-proof, but also among the most AI-ready multi-tenant facilities in the region,” Thompson wrote in an emailed statement.
Crusoe and Tallgrass will soon join the ranks. Crusoe will be the data center owner, having built and, earlier this year, expanded a similar center in Texas. Tallgrass will provide energy infrastructure, including a CO2 sequestration hub via a grant from the Wyoming Energy Authority.
Compared to other states where data centers number in the hundreds, Wyoming only has a handful. President Trump’s Stargate Initiative, China’s “DeepSeek Scare” and “AI hype” have led to the conditions for a surge in data center construction. The U.S. Department of Energy expects demands for the services provided by data centers will “double or triple” before 2030.
While some in other states have organized against the construction of new centers, Cheyenne Mayor Collins wants developers and investors to know:
“Cheyenne has worked for a number of years to prepare itself for the opportunity, for [the] economic development.”
Collins sees Wyoming’s energy abundance and business-friendly environment as a prime opportunity to attract similar companies. Additionally, the mayor noted Cheyenne‘s proximity to core, fiber-optical cables that connect the Internet globally as a geographical bonus. A company’s latency, or the speed at which it can transfer data from its center to your phone, for example, is made lower by being closer to hubs of telecommunications infrastructure, such as the I-80 corridor.
Collins said his goals are to help diversify the state economy by bringing jobs that young people want to the city. His take on solving the state’s brain drain crisis.
”I think this is a great opportunity for us to give [young people] the kind of jobs they're looking for in other places,” said Collins. “But be able to do that here in Wyoming.”
Despite futuristic visions and promises of untold earnings, many of the data centers currently in Cheyenne were built pre-AI scramble. And while companies rush to integrate AI, few have reported a direct revenue return credited to AI.
Collins believes that it won’t take long for people to figure it out.
Staying Cool
No matter where you are, tech keeping these centers cool is the backbone of the boom, second only to energy. Mayor Collins said the Wyoming weather will help alleviate some of the water needed for cooling the tech-heavy center. However, he said traditional cooling issues are old school in the face of modern technology.
“Here in Cheyenne, our first Microsoft data center was water-cooled…using a kind of swamp cooling system,” said Collins. “Now they use closed-loop systems that reduce the amount of water used.”
Closed-loop cooling would circulate liquid coolant directly onto the chip, instead of constantly pumping water in and out or letting it evaporate in the cooling process. Ideally, this means the new data center’s water needs would primarily concern day-to-day usage (kitchen, sink, bathroom, etc).
The mayor’s sentiment lines up with an increasingly common understanding among data center developers that traditional cooling can’t scale with AI needs. Air cooling (the use of systems to circulate air and remove excess heat) and liquid cooling (the use of water and pipes to remove excess heat) have provided sufficient means of managing excess heat in the past, but the demand for AI in all sectors is pushing these methods to their limits.
Some data centers have gone a step further, using immersion cooling technology. This tech submerges the entire hard-drive rack into a liquid designed for electronics. While Crusoe has opted to explore closed-loop technology, Mayor Collins said water usage remains a top-of-mind concern in the West.
“ Cheyenne gets most of our water from the Colorado River Reservoir drainage system, and we know that that water is challenged these days. And so we're trying to be very careful to make sure we don't make promises we can't keep,” said Collins.
While the project won’t be under the purview of the city, Collins said Laramie County is clear about water limitations during developer agreements. The mayor is currently unaware of the specific amount of water that Cursoe will be using.
Regardless of a center's choice of system, modern data centers can use up to 40% of their annual power on cooling needs alone. While Crusoe may ultimately use less water than an average data center, it will nonetheless need access to an already crowded source. A source that other data centers in the West will need to draw from as well, the Colorado River. Innovation in cooling technology means your chips can process more, but more processing will require more energy.
Massive Energy Demands
Renewable technologies have made energy targets cheaper to achieve. An example is Microsoft’s data center in Cheyenne, powered entirely by wind energy credits from Black Hills Energy and a wind farm in Kansas. But capital behind AI has set goals that wind nor solar can realistically achieve.
The Department of Energy says one gigawatt of power is equal to the power produced by 294 utility-scale wind turbines, or used by 100 million LED bulbs. At 1.8 gigawatts, the Wyoming center would operate on far more energy than needed to power over one million homes – far more than exists in the state.
The future Crusoe AI data center will be scalable to 10 gigawatts. The project is expected to “leverage a diverse and robust power strategy, integrating multiple energy sources fueled by natural gas and future renewable energy developments in the region,” according to a press release announcing it.
Mayor Collins added that an agreement called the large project contract service tariff (LPST) will keep the centers' costs separate from homes and businesses.
“ [The LPST] basically ensures that data centers, the cost to provide the electricity to them, is separate from anything that happens with our small businesses and our residences,” said Mayor Collins. He added that, should the cost ever find its way to residents, the public service commission could prevent Black Hills from charging those increased costs.
Most AI data centers will eventually require two-digit gigawatt ranges to function, with many relying on natural gas to achieve current goals. Global consulting firm McKinsey and Company found AI data centers will have an annual demand of up to 298 gigawatts by 2030. The U.S. is expected to add a little over 60 gigawatts of energy this year, with Wyoming providing a portion of wind growth.
The focus for data centers today is upgrading already operating active AI systems like OpenAI’s ChatGPT5 or Microsoft’s Copilot for services like AI-enabled searches or video-prompt generation. As well as training new AI models on increasingly larger or refined data sets.
Not all data centers are AI, but all data centers have plans to meet AI demand. A company’s ability to quickly implement these changes is known as hyperscaling.
Hyperscaling involves facilities switching from the former standard of central processing units (CPUs), which can carry out a single process efficiently, to graphical processing units, which can run multiple different processes at the same time, also called parallel processing.
This processing power is highly sought after by corporations, governments, and tech companies.
Local Results
As a result of upscaled operations and AI incorporation, these companies are usually able to provide kickbacks to local governments in the form of a couple of jobs and increased tax revenue. Numbers have yet to be released on how many jobs will be created or what kind of occupations a new data center might attract. However, a faculty in Texas developed by Crusoe brought 1,500 construction jobs, but will ultimately employ a few hundred workers.
Massive operations, regardless of tech and safety, still run the risk of major environmental impact. Some have argued that 1,000 highly specialized jobs are not a sufficient trade for ever-increasing energy demands. Others have experienced decreases in their quality of life living near major data centers. Failing to address these concerns, frustration continues to build in some communities.
This reporting was made possible by a grant from the Corporation For Public Broadcasting, supporting state government coverage in the state. Wyoming Public Media and Jackson Hole Community Radio are partnering to cover state issues both on air and online.
