Anthropic signs $19 billion lease for Kentucky data center
AI company Anthropic signed a 20-year lease for a data center being built in Hancock County, Kentucky. The agreement is expected to generate $19 billion in lease revenue for project owner TeraWulf. The data center will be built on the site of a former aluminum smelter and require massive amounts of electricity. Despite projected tax benefits, the project has faced community pushback over environmental and infrastructure concerns. Anthropic, the California-based artificial intelligence company known for its Claude platform, signed a 20-year lease with a data center in development in Kentucky's Hancock County, according to TeraWulf, the project owner. The company expects $19 billion in lease revenue from the agreement, which "creates a framework for future expansion, and demonstrates the value of our ability to source power, develop infrastructure, and secure long-term customer commitments," Paul Prager, CEO of TeraWulf, said in a statement. The Hancock County data center, announced earlier this year, appears to be the first major data center in Kentucky to publicly announce a tenant. Anthropic is one of the world's leading AI companies, and recently announced a valuation of nearly $1 trillion. AI operations require huge amounts of computing power, which data centers supply, using large amounts of electricity in the process. The agreement between TeraWulf and Anthropic ramps up to about 400 megawatts of capacity by early 2028 — enough to power more than 300,000 homes. The project is in development on the site of the former Century Aluminum smelter near Hawesville, and benefits from the smelter's existing infrastructure access. TeraWulf said development itself would involve $4 billion in investment, and previous estimates from the company suggested a future tenant would invest an additional $10 billion or more. The outpouring of money to build out the data center, which TeraWulf aims to initially bring online for Anthropic by the second half of next year, dwarfs the relatively rural Hancock County area, with a population of 9,000. The company previously estimated the project would contribute about $14.5 million per year in state sales tax, and $7 million in annual school tax contribution — more than $4,000 for every student in the Hancock County School District. But along with other data centers around the state, the Hancock County project has received community pushback due to fears of infrastructure strain, environmental harm and other issues. A petition to pause the project has garnered more than 1,200 signatures. Kerry Langlais, TeraWulf's chief strategy officer, said in a previous statement that the company is "working collaboratively with local stakeholders, community members, and utility partners to ensure the project is developed responsibly and transparently." Big Rivers Electric Corp., the utility serving the area, filed an electric service agreement in April, and told regulators it was "designed so that TeraWulf bears all identified risks and costs associated with Big Rivers obtaining, transmitting, and delivering the capacity and energy necessary" to power the Hancock County data center. TeraWulf is also building a data center in Eastern Kentucky, near Ashland. The company has yet to announce a tenant for that project. In announcing the Eastern Kentucky plans, TeraWulf described Kentucky as "an attractive market for large-scale AI and (high-performance computing) development due to its robust energy infrastructure, supportive business environment, and strong engagement from state and local stakeholders."
Source: The Courier-Journal