Microsoft has secured a 3,200‑acre parcel in Cheyenne, Wyoming, to build a new data‑center campus that will support its expanding Azure and AI services. The acquisition includes a 200‑acre site in Bison Business Park and a 3,000‑acre site southeast of Cheyenne, building on Microsoft’s existing footprint that began in 2012 and now includes 11 operational data centers in the state.
The deal is underpinned by a partnership with Black Hills Energy, which will provide the power and infrastructure upgrades needed for the new facility. Microsoft will pay for the upgrades, ensuring that the expansion does not raise local electricity prices for existing customers. The partnership is structured through the Large Power Contract Service tariff, allowing Microsoft to secure the energy it needs while protecting the community’s rate base.
Microsoft has committed more than $68 million to completed and future off‑site infrastructure improvements, including roadways, storm‑sewer systems, and water infrastructure. These investments are intended to support the campus and the surrounding community, creating thousands of construction jobs and hundreds of permanent roles in IT, security, and facility management.
The expansion is a key component of Microsoft’s AI‑first strategy, providing the scale and energy efficiency required for AI workloads that consume significantly more electricity than traditional cloud services. The company’s existing Cheyenne data centers already use direct evaporative cooling and invest in water replenishment projects, and the new campus will continue that focus on water stewardship and low potable‑water use for cooling.
"Since the development of our first datacenter in 2012, Microsoft has been working to strengthen, not strain, the community of Cheyenne," said Bowen Wallace, Corporate Vice President, Datacenters‑Americas Region. "We’re excited to continue our growth in the state bringing more investment, opportunity and tax revenue to the community we’ve been a part of for more than 14 years.”
Mayor Patrick Collins added, "This is the latest in a long line of investments that Microsoft has brought to the city of Cheyenne as a member of our community since 2012. Microsoft recognises the strength of our city’s workers, infrastructure and economy. This expansion represents the next decade of opportunity and tax revenue that secures the quality of life that residents of our city enjoy."
Wes Ashton, Vice President of Utilities in Wyoming and South Dakota at Black Hills Energy, noted, "We have been a proud partner with Microsoft for more than a decade in Cheyenne, providing energy solutions and mission‑critical electric reliability to its data centre operations. That partnership supports economic growth in Wyoming, and our flexible and innovative tariff provisions allow us to meet Microsoft’s expanding energy needs while protecting base retail customers from rate impacts."
Rima Alaily, Vice President and General Counsel for Microsoft Infrastructure and Legal Affairs, said, "We built our first data center in Cheyenne back in 2012, more than a decade ago. At the time, we were really attracted by the city’s high‑skilled workforce, its infrastructure and its real, thriving energy industry. I think today, the investment that we’re making is really a commitment to continued growth in Cheyenne for those same reasons. They continue to be true."
The announcement has already sparked a positive market reaction for Black Hills Energy, whose stock rose 6% following the news, reflecting investor confidence in the new partnership and the revenue it will generate without impacting existing customers’ rates. The expansion underscores Microsoft’s long‑term strategy to build a robust, energy‑efficient data‑center network that supports its AI‑first business model while delivering tangible benefits to the local community.
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