Introduction
In July 2025, Cheyenne, Wyoming, became the focal point of a groundbreaking yet controversial development in the artificial intelligence (AI) sector. Mayor Patrick Collins announced plans for a massive AI data center, a joint venture between energy infrastructure company Tallgrass and AI data center developer Crusoe. This facility, poised to be one of the largest of its kind globally, is expected to consume more electricity than all residential households in Wyoming combined, raising significant questions about energy sustainability, economic impacts, and environmental consequences. This report explores the details of the project, its energy demands, potential implications for Wyoming’s energy landscape, and the broader context of AI-driven power consumption in the United States.
Project Overview
The proposed AI data center, to be located several miles south of Cheyenne near the Colorado border along U.S. Route 85, is designed to start with a power capacity of 1.8 gigawatts (GW), with the potential to scale up to an unprecedented 10 GW. To put this in perspective, a single gigawatt can power approximately one million homes, while Wyoming, the least populous U.S. state, has a population of roughly 590,000 residents. The initial 1.8-GW phase is projected to consume 15.8 terawatt-hours (TWh) annually, which is over five times the electricity used by all Wyoming households combined and represents 91% of the state’s total current consumption of 17.3 TWh across residential, commercial, and industrial sectors. At full capacity, the data center’s 10-GW operation would demand 87.6 TWh annually—double the 43.2 TWh Wyoming currently generates from all sources.
The sheer scale of this energy demand makes it infeasible to rely on the state’s public power grid. Instead, the project will incorporate its own dedicated energy supply, combining natural gas generation with renewable energy sources, as confirmed by Mayor Collins and company officials. This approach aims to mitigate direct strain on Wyoming’s grid, but it introduces new challenges and opportunities for the state’s energy economy.
Wyoming’s Energy Landscape
Wyoming is a powerhouse in U.S. energy production, ranking as the nation’s third-largest net energy supplier, behind only Texas, New Mexico, and Pennsylvania. The state produces approximately 12 times more energy than it consumes, primarily through fossil fuels such as coal (52% of electricity generation), oil, and natural gas, with wind and solar contributing about 35%. Wyoming exports nearly 60% of its electricity to other states, making it a critical player in the national energy market. The state’s cool climate and abundant energy resources have already attracted tech giants like Microsoft, which has operated data centers in Cheyenne since 2012, and Meta, which is nearing completion of an $800 million data center.
The proposed AI data center pushes Wyoming into uncharted territory. While the state’s energy exports have historically supported other regions, this project’s massive in-state demand could reshape its role as an energy exporter. Wyoming Governor Mark Gordon has praised the project, noting its potential to bolster the state’s natural gas industry. “This is exciting news for Wyoming and for Wyoming natural gas producers,” Gordon stated, highlighting the economic benefits of leveraging local resources to power the facility.
The Role of Tallgrass and Crusoe
The partnership between Tallgrass and Crusoe is central to the project’s execution. Tallgrass, a regional energy infrastructure company, will develop the dedicated power supply, likely through a combination of natural gas plants and renewable energy installations. Crusoe, known for its expertise in AI data center development, will oversee the facility’s design and operation. Crusoe’s prior collaboration with OpenAI on a massive data center in Abilene, Texas, described as the “largest data center in the world,” has fueled speculation that OpenAI may be the tenant for the Cheyenne project. OpenAI’s ambitious “Stargate” AI infrastructure initiative, announced in January 2025, aims to develop multiple gigawatt-scale data centers across the U.S. However, Crusoe spokesperson Andrew Schmitt declined to confirm or deny OpenAI’s involvement, stating, “We are not at a stage that we are ready to announce our tenant there.”
The secrecy surrounding the data center’s end user has sparked widespread curiosity. Industry experts suggest the facility will house advanced AI hardware, such blueberry optimized for deep learning and model training. These systems, featuring high-performance CPUs in dense, rack-mounted configurations, require immense power and sustained cooling, explaining the project’s extraordinary energy demands.
Energy and Environmental Implications
The environmental implications of the data center are significant. Wyoming’s electricity mix is heavily reliant on fossil fuels, with coal and natural gas dominating production. While the project plans to incorporate renewable energy, the scale of its power needs suggests a heavy reliance on natural gas, raising concerns about carbon emissions. Critics argue that such energy-intensive projects could undermine climate goals, especially as AI data centers nationwide are projected to increase U.S. electricity demand by up to 50% by 2028. Data centers already account for 4.4% of U.S. electricity consumption, and this figure could rise to 12% within a few years.
Moreover, the project’s water usage for cooling systems is another concern. AI data centers often employ evaporative cooling, which can consume millions of liters of water daily—equivalent to the daily consumption of thousands of households. In water-scarce Western states, this could exacerbate resource challenges, although Wyoming’s specific water constraints remain less severe than those in states like Nevada or Utah.
Despite these concerns, proponents argue that the data center’s dedicated power supply could minimize direct impacts on local residents. By generating its own electricity, the facility avoids overloading the public grid, potentially preventing blackouts. However, experts warn that indirect effects, such as increased demand for natural gas or renewable energy infrastructure, could still influence local utility costs and supply chains. Wyoming’s identity as a major energy exporter may also be tested if similar large-scale projects emerge, potentially tightening supplies and raising prices regionally.
Economic and Social Impacts
The economic benefits of the data center are a key selling point for state and local officials. The project is expected to create jobs, stimulate the natural gas industry, and attract further investment to Cheyenne, which has already established itself as a computing hub. Mayor Collins described the project as a “game changer,” emphasizing its potential to drive economic growth. However, public sentiment, as reflected in posts on X, reveals concerns about rising electricity costs for residents. Some users have expressed alarm about the environmental toll, with one post stating, “We’re definitely going to end up boiling the oceans,” highlighting fears of unsustainable energy consumption.
The project requires approval from state and local regulators, but Collins remains optimistic about a swift timeline, suggesting construction could begin soon. The facility’s development aligns with broader national trends, as AI infrastructure demands accelerate faster than energy systems can adapt. For instance, utilities like Pacific Gas & Electric have delayed coal plant retirements, and Texas grid operators have issued emergency alerts to manage rising demand.
Broader Context: AI and Energy Consumption
The Wyoming data center is part of a larger wave of AI-driven energy consumption across the U.S. A single ChatGPT query consumes approximately 2.9 watt-hours of electricity, compared to 0.3 watt-hours for a standard web search, illustrating the energy intensity of AI operations. Nationwide, data centers are reshaping energy and water usage, with some estimates comparing their future energy footprint to entire countries like Poland. Other states, such as Nevada and Colorado, face similar challenges, with planned data centers requiring significant expansions of local electricity and water resources.
The secrecy surrounding the Wyoming data center’s tenant adds intrigue. While OpenAI’s involvement remains unconfirmed, its history with Crusoe and its Stargate project suggests a plausible connection. Regardless of the tenant, the facility’s advanced hardware will likely support cutting-edge AI applications, from model training to real-time analytics, further intensifying energy demands.
Conclusion
The proposed AI data center in Cheyenne, Wyoming, represents a pivotal moment in the intersection of technology, energy, and sustainability. Its unprecedented power consumption—surpassing that of all Wyoming households combined—underscores the immense energy demands of modern AI infrastructure. While the project promises economic benefits and leverages Wyoming’s energy resources, it also raises critical questions about environmental impacts, utility costs, and resource allocation. As the state navigates this transformative development, the balance between technological advancement and sustainable energy practices will be crucial. The Wyoming data center is a microcosm of the broader challenges facing the AI industry, where innovation must be weighed against its environmental and societal costs.
