The data center marketplace, and the sudden need to generate far more power than the grid can provide, is driving the largest market boom in decades.
Babcock & Wilcox (B&W), one of the beneficiaries, is reporting major orders for power generation and other infrastructure, primarily driven by the data center sector.
Most recently the company inked a $1.5 billion contract with Applied Digital to deliver and install over 1 GW of natural gas generation for AI data center projects. The company is also winning bids to convert coal plants to natural gas.
B&W just revealed that its AI data center orders pipeline reached over $3.0 billion out of a total companywide global pipeline of more than $10.0 billion. Much of this expansion is founded upon its natural gas technology knowledge and directed at meeting the growing power demands of artificial intelligence data centers.
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“This initial project with Applied Digital represents an exciting and transformational opportunity to broaden B&W’s customer base as we expand into the rapidly evolving AI data center space,” said Kenneth Young, CEO. “Our growing backlog, 56% higher compared to the same period last year, stems from increasing demand across thermal projects, upgrades and construction — as baseload generation needs in North America continue to accelerate.”
Like many other major players in the energy industry, B&W has a growing delivery backlog. The CEO predicted more than a 20% jump in revenue for 2026. This estimate does not include new new data center orders, so expansion could be higher.
B&W plans to design and install four 300 MW natural gas-fired power plants at an Applied Digital site (it will probably be in the Dakotas, with full details at the start of 2026) including boilers and associated steam turbines. The plant should begin operation in 2028. B&W also expects to sign an ongoing parts and services contract to support the facility once commercial operation begins.
“The B&W advanced boiler and steam turbine technology delivers efficiencies on par with simple-cycle gas turbines we evaluated – while enabling faster deployment,” said Wes Cummins, CEO of Applied Digital. “This partnership enhances our ability to add more capacity to current and future sites, giving Applied Digital a distinct speed-to-market advantage in bringing power generation online.”
The CEO of Applied Digital has made it clear just how dangerous a gas turbine backlog could be to OEMs like GE Vernova, Mitsubishi Power, Siemens Energy, Ansaldo Energia, and Solar Turbines. If they cannot guarantee delivery in a reasonable timeframe, the market will look elsewhere. B&W has one alternative – boilers and steam turbines. Others include batteries and gas engines.
“B&W has designed and installed thousands of boilers and has more than 400 GW of installed generating capacity at utility and industrial plants around the world,” said Young. “Our solutions for AI data centers are proven technologies that utilize natural gas efficiently while providing reliable, redundant and readily available power faster than combined-cycle or simple-cycle plants.”
Meanwhile, the company has divested certain assets to focus on its core markets. This included the sale of Diamond Power International, a designer and manufacturer of boiler cleaning systems, to Austria-based Andritz.
B&W also sold its Allen-Sherman-Hoff (ASH) business, which will continue to manufacture of ash handling systems, equipment and replacement parts for power generation, renewable power production, waste-to-energy, pulp & paper, refineries, petrochemical, and other industries.
However, B&W will continue to market ASH and Diamond Power products and services to customers in the utility power sectors. All of these deals forward debt reduction, balance sheet strengthening, and core business alignment goals.
Young says the company’s focus now is on, “delivering advanced power generation and environmental solutions, and on capitalizing on opportunities to provide reliable, available energy systems for artificial intelligence data centers.”
B&W has also entered a strategic partnership with Denham Capital to help convert existing coal plants to natural gas to power data centers in the U.S. and Europe.
With U.S. data centers expected to consume 65 GW of power between 2025 and 2028, there will be a shortfall of about 45 GW unless development and construction get going rapidly.
But severe barriers lie in the path of reaching the 65 GW target: A five-year median interconnection timeline for U.S. power projects, amid 2,200 GWs of projects in interconnection queues.
This new partnership combines Denham’s knowledge in developing, building, and operating large-scale power plants across six continents with B&W’s experience in coal power generation and conversion of coal-fired power plants to burn natural gas.
“Data centers have created an unprecedented and immediate demand for power generation, the likes of which we have not seen in nearly two decades,” said Justin DeAngelis, Global Head of Sustainable Infrastructure at Denham Capital. “Time-to-power has become a key focal point for data center developers and hyperscalers”.
Gas Turbine World’s annual Market Forecast was revised (significantly) to account for this surge of data center orders we’re seeing in 2025. This mid-year update of the Forecast takes into account the actual number of sales recorded in the first six months of 2025, with a balance of this year projection. To order your copy of the Forecast, please use this link (CLICK HERE).
For more background on data center / AI impact on new equipment sales, see our review of the 2025 Data Center World Conference: “Powering the Data Center Boom.”
