TL;DR · 30-second read
The Short Version
A company called Applied Digital plans to spend $3.2 billion on a huge building full of computers for artificial intelligence near Brookwood, a town in Alabama. At full size it would have about as much floor space as 20 American football fields. It should start running in 2028.
The notable part is the deal with the town. Applied Digital promised to pay the local area $270 million over 20 years. That is on top of an estimated $131 million in taxes, even though only about 100 people will work there permanently.
Applied Digital has confirmed that Delta Forge 2, a $3.2 billion, 210MW AI data center, will be built on a 1,300-acre site near Brookwood in Alabama’s Tuscaloosa County, Data Center Dynamics reported on September 25, 2026. The campus is planned at 1.2 million square feet at full build-out, with operations expected to begin in 2028. The tenant is an unnamed customer that Applied Digital describes as an “investment grade hyperscaler,” meaning one of the very large cloud and AI platform operators.
The company is committing $270 million in community benefits payments to the Tuscaloosa County Economic Development Authority over 20 years, alongside an estimated $131 million in tax revenue for the area. The project is expected to support up to 1,000 construction jobs and 100 permanent roles. The Tuscaloosa Thread reported that the county board approved incentives for the project unanimously.
Executive Summary
Applied Digital said in June that it had signed a customer for a new 210MW data center, but it did not say where. Naming Brookwood completes a basic picture of the project: a customer, a site, a budget, a target date and local approval. It also puts a campus on the company’s map outside North Dakota, where its Polaris Forge 1 and 2 campuses sit.
The most informative number is not the $3.2 billion headline. It is the $270 million community payment. That is roughly 8% of the stated investment and larger than the project’s estimated tax contribution. For a facility with 100 permanent jobs, the negotiated fiscal package, more than employment, is what the host community receives in return. That makes the local agreement a real cost of bringing AI capacity online, one that developers have to budget for alongside land, power and construction.
The $270 Million Pledge Is a Line Item, Not a Gesture
Applied Digital’s commitment of $270 million over 20 years to the Tuscaloosa County Economic Development Authority is large enough to register in the project’s economics. Against the $3.2 billion stated investment, it is roughly 8%. Spread across 210MW of capacity, it comes to about $1.3 million per megawatt. Averaged over two decades, it is about $13.5 million a year, although the company has not said whether payments are level, front-loaded or tied to construction milestones.
The pledge is also larger than the other fiscal figure attached to the project, an estimated $131 million in tax revenue. The period behind that tax estimate was not specified, so the two numbers are not a strict like-for-like comparison. Still, of the two local benefits disclosed, the negotiated payment is the bigger one, not the ordinary tax base. For site selection, that changes the calculation. When a county’s approval comes with a multi-decade cash commitment on this scale, the community agreement becomes part of the cost of delivering capacity. It has to be priced into the lease the same way power and construction are.
Three groups are affected. Other developers pitching large AI campuses to rural and suburban counties may now find this package used as a reference point in negotiations. Local economic development authorities gain a contracted revenue stream instead of relying only on assessed taxes, which can be reduced by abatements. The tenant’s lease pricing ultimately has to cover the developer’s full cost of delivering the site.
Why Capital-Heavy, Job-Light Projects Pay Their Way in Cash
A $3.2 billion project that supports 100 permanent roles represents about $32 million of investment per permanent job. That ratio is typical of large data centers. Most of the spending goes to buildings, electrical equipment and cooling systems, not payroll. The up-to-1,000 construction jobs are substantial, but they are temporary by definition.
This is the mechanism behind the size of the payment. Traditional economic development deals trade tax incentives for jobs. A data center cannot offer many jobs, so it offers direct fiscal commitments instead. Brookwood mayor Joe Barger’s comments point in that direction. The mayor framed the project around “strengthening our schools” and benefits “for generations to come,” which reflects a long-term revenue case more than a hiring case. The unanimous board vote suggests the county found the exchange acceptable. The value of the incentives the county granted in return has not been published, so the net fiscal benefit cannot yet be calculated.
A Portfolio Built on a Few Very Large Tenants
Applied Digital, founded in 2021 as Applied Blockchain, now reports a contracted portfolio of five AI Factory campuses totaling 1.4GW of critical IT load. Critical IT load is the power available to servers and networking gear, excluding cooling and other facility needs. The company reports approximately 2.15GW of grid-connected utility power behind that portfolio. The gap of roughly 750MW is the extra electricity a site must secure to run cooling and other facility systems and to keep some headroom. Securing grid power, not just signing tenants, is the harder half of this business.
Chairman and CEO Wes Cummins called Delta Forge 2 part of “repeatable AI infrastructure delivered at scale.” Part of that claim is supported by disclosed facts: multiple campuses under contract, one tenant named (CoreWeave at Polaris Forge 1), and repeat business from one customer. The same high-investment-grade hyperscaler that signed at Delta Forge 1 also took 300MW at Polaris Forge 3. The company’s statement that it has a “proven track record of delivering on our commitments to our host communities” is not accompanied by delivered-capacity or payment-history figures. Much of the portfolio is concentrated in a small number of unnamed hyperscale tenants. That concentration brings strong credit, but it also means the business depends heavily on a few counterparties.
What Has to Go Right by 2028
Delta Forge 2’s 2028 start follows Polaris Forge 3, where initial operations are targeted for August 2027. That puts overlapping large builds on the company’s schedule. Hitting both dates depends on things not addressed in the announcement: the utility and grid connection for a 210MW load in Tuscaloosa County, procurement of long-lead electrical equipment, and financing for a project of this size. The move to Alabama widens the company’s geographic reach, but it also means building a new set of utility, contractor and permitting relationships far from its North Dakota base.
Background
Applied Digital was founded in 2021 as Applied Blockchain and has repositioned itself as a developer of data centers for artificial intelligence and high-performance computing. It builds large campuses and leases them to a small number of major tenants. Its Polaris Forge 1 campus in Ellendale, North Dakota, is set to be leased to CoreWeave. Polaris Forge 2 in Harwood, North Dakota, is largely committed to an unnamed investment-grade hyperscaler. Polaris Forge 3, on 600 acres in an unnamed northern state, will provide 300MW to the same hyperscaler that signed at Delta Forge 1, with initial operations targeted for August 2027.
AI data centers differ from conventional ones mainly in power density. Training and running large AI models requires far more electricity per rack of servers, so developers compete on how much grid power they can secure and how quickly. That has made site selection a negotiation over power, land and local fiscal terms, as much as over proximity to users. Source: Applied Digital reveals $3.2bn Delta Forge 2 AI data center will be built in Alabama (Data Center Dynamics). Location, scale, timeline and community commitments for Applied Digital’s 210MW Brookwood campus. Additional coverage: County Board Unanimously OKs Incentives for $3.2 Billion Applied Digital Data Center in Brookwood (Tuscaloosa Thread); $3.2 Billion AI Data Center Campus Announced in Brookwood (WBMA); Applied Digital confirms $3.2 billion data center campus in Brookwood (WBRC); Applied Digital confirms Brookwood data center (WBRC); Massive $3.2B AI data center coming to Brookwood (WVTM Channel 13).Sources