Microsoft’s Strategy for Cheyenne Data Centre Site Expansion

Microsoft is moving to expand its data centre operations in Cheyenne, Wyoming, with plans to acquire around 3,200 acres of land as part of a long-term development strategy. The move builds on an existing footprint in the region and reflects how hyperscale operators are scaling infrastructure to meet growing demand for cloud and AI workloads.

The proposed development spans two parcels: a 200-acre site in Bison Business Park and a further 3,000 acres in southeast Cheyenne. Together, they form the foundation of what Microsoft describes as a multiyear planning and construction effort, with several stages subject to public consultation and approval.

“Wyoming has helped power Microsoft's cloud for more than 14 years – and our commitment to the community continues to grow,” says Noelle Walsh, President of Cloud Operations and Innovation at Microsoft, writing on LinkedIn.

“Our CO+I teams who design, build, and operate our data centres focus not only on scale and reliability, but on showing up as long-term, trusted partners in the communities where we operate. 

“In Cheyenne, that means taking the time to engage with neighbours early. We’re paying our own way for power and infrastructure, minimising water use while replenishing more than we consume and creating pathways into skilled trades and long-term careers.

“We look forward to continuing the conversation with the Cheyenne community as the planning moves ahead.”

Scaling infrastructure for data centre growth

The expansion highlights how data centre operators are securing land and infrastructure at scale to support future capacity. Microsoft’s plans include not only server facilities but also the supporting systems required to run them – power, water, connectivity and transport infrastructure.

The company commits more than US$68m to off-site infrastructure improvements across Cheyenne. These include road upgrades, stormwater systems, pump stations and municipal water enhancements. While these are essential for data centre operations, they also integrate with public infrastructure used by residents.

Energy remains central to the expansion. Microsoft confirms it will fund the full cost of electricity infrastructure required for its operations through an agreement with Black Hills Energy. This is structured under the Large Power Contract Service tariff, which ensures that upgrades and energy procurement linked to the data centre load do not increase costs for other customers.

Wes Ashton, Vice President of Utilities in Wyoming and South Dakota at Black Hills Energy, says: “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.”

Alongside grid investment, Microsoft states it will continue sourcing carbon-free electricity to match its consumption, working within the Western Electricity Coordinating Council region. This aligns with wider efforts across the sector to balance rising energy demand with lower carbon intensity.

Water, cooling and operational efficiency

Cooling infrastructure is another focus, particularly in a region where water use is closely managed.

Microsoft’s existing Cheyenne data centres use direct evaporative cooling, a system that reduces temperature by evaporating water into airflow. The company notes that this approach uses water for less than 10% of the year. Newer facility designs go further, in some cases removing the need for continuous water access after initial system fill.

Alongside this, Microsoft is investing in water replenishment projects across the Mississippi–Missouri and Colorado River basins. These initiatives aim to restore more water than the facilities consume, with projects in Cheyenne expected to return around 566 million gallons through partnerships with environmental organisations.

Workforce and regional economic impact

The expansion also reflects the labour demands tied to large-scale data centre construction and operations. Microsoft states that thousands of skilled workers will be required during the build phase, including electricians, pipefitters, carpenters and steelworkers.

Once operational, the sites are expected to create hundreds of permanent roles across IT, security and facility management. To support this pipeline, Microsoft continues its Datacenter Academy partnership with Laramie County Community College, which has trained more than 1,000 students since launching in 2019.

Cooling infrastructure is another focus, particularly in a region where water use is closely managed. Microsoft’s existing Cheyenne data centres use direct evaporative cooling, a system that reduces temperature by evaporating water into airflow. The company notes that this approach uses water for less than 10% of the year.

Newer facility designs go further, in some cases removing the need for continuous water access after initial system fill. Alongside this, Microsoft is investing in water replenishment projects across the Mississippi–Missouri and Colorado River basins. These initiatives aim to restore more water than the facilities consume, with projects in Cheyenne expected to return around 566 million gallons through partnerships with environmental organisations.

Workforce and regional economic impact

The expansion also reflects the labour demands tied to large-scale data centre construction and operations. Microsoft states that thousands of skilled workers will be required during the build phase, including electricians, pipefitters, carpenters and steelworkers.

Once operational, the sites are expected to create hundreds of permanent roles across IT, security and facility management. To support this pipeline, Microsoft continues its Datacenter Academy partnership with Laramie County Community College, which has trained more than 1,000 students since launching in 2019.

Local government sees the expansion as part of a longer economic trajectory for the region. Mayor Patrick Collins says: “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."

Tax contributions form a visible part of that impact. In 2025, Microsoft’s data centres contribute more than US$11m to the local tax base, supporting public services including schools, hospitals and libraries.

As planning progresses, Microsoft indicates that further details will emerge through consultations, with the development positioned as a long-term addition to its US data centre portfolio.