Babcock & Wilcox receives approval for a $2.4 billion project that will power AI campuses

Babcock & Wilcox announced on Wednesday that a company backed by Applied Digital has approved their $2.4 billion 'deal' to supply?equipment for the artificial intelligence campuses of the technology firm.

After Base Electron announced the final notice of the 1.2 gigawatt project, Babcock shares surged by nearly 23% during premarket trading.

The U.S. demand for power reached record levels in 2025, and it is expected to increase this year as major technology companies rapidly expand their data centers. Some of these data centres use as much energy as an entire city.

Base Electron was formed by Applied Digital to provide power for the AI campuses of the technology firm under separate agreements. The power producer then hired Babcock for the design, procurement and construction of the facility.

Babcock has agreed to supply four natural gas-fired 300 megawatt boilers, as well as steam turbine generators.

According to Babcock &Wilcox, Applied Digital's CEO Wes Cummins stated that the company was also evaluating a?option with Base Electron? to deliver an additional 1.2 GW in future generation capacity.

Separately Babcock reported a revenue in the 'fourth quarter of $161.0 Million,?beating the analysts' average estimate for $155.60 Million, according to LSEG data.

Babcock CEO Kenneth Young said that they are currently in talks?on additional data center opportunities, reflected in their current pipeline of over $12 billion.

Young said, "We're also seeing an increased coal use and opportunities to deliver a?coal technology that provides reliable and secure electricity to our utility clients in North America." (Reporting by Dharna Bafna in Bengaluru; Editing by Leroy Leo)

(source: Reuters)