$3B AI Data Center Planned for North Dakota, Addressing Power & Water Needs
Applied Digital, a Dallas-based technology infrastructure provider, is set to significantly expand its presence in North Dakota with a planned $3 billion artificial intelligence data center near Fargo. The Polaris Forge 2 project, a sprawling 900-acre, 280-megawatt facility in Harwood, marks the company’s third data center campus in the state’s southeast corner, following existing operations in Jamestown and Ellendale.
The ambitious project, which Applied Digital aims to break ground on in September, is currently navigating local permit processes, including a necessary zoning change from agricultural to commercial for the private land it will occupy. Negotiations are also underway with the facility’s future client, described by Applied spokesman Nick Phillips as “hyperscalers”—a term referring to a select group of very large technology companies. Phillips noted that the company’s favorable position allows them to proceed with the groundbreaking, despite the project only being publicly announced recently. Applied Digital is also committed to engaging with the local community as the development progresses.
A primary consideration for such a large-scale endeavor is its substantial power requirements. Applied Digital’s existing facilities in North Dakota already draw considerable energy: the Jamestown site uses 100 megawatts, while the Ellendale campus, when fully built out, is projected to consume 530 megawatts. To put this in perspective, the combined peak demand of Bismarck, Mandan, and a local oil refinery is approximately 180 megawatts. While some large data centers in other parts of the country have been linked to rising electricity rates, Applied Digital asserts that Polaris Forge 2 will not negatively impact consumer prices. The company chose the Harwood location due to the availability of power on existing transmission lines, ensuring the project taps into surplus capacity.
Power for the Harwood data center will be supplied by Cass County Electric Cooperative, which distributes electricity generated by Minnkota Power Cooperative. Minnkota’s generation portfolio includes a coal plant in Oliver County and multiple wind farms in eastern North Dakota. Unlike investor-owned utilities such as Montana-Dakota Utilities (MDU), whose rates are regulated by the state Public Service Commission (PSC), cooperative rates like Minnkota’s are not subject to PSC oversight. Applied Digital and the cooperatives are in the final stages of contract negotiations, with the company expecting electricity rates to remain consistent with current levels. Interestingly, previous arrangements with MDU for Applied Digital’s other North Dakota facilities have even resulted in financial benefits for consumers through utility bill refunds mandated by state regulators.
Beyond electricity, data centers are often scrutinized for their significant water demands, primarily for cooling. However, Applied Digital claims its North Dakota facilities require less water due to the state’s naturally cold climate. Furthermore, the company employs a “closed-loop water system” that recirculates water, substantially reducing consumption. For the Harwood data center, water usage is projected to be remarkably low, comparable to that of just two average households.
North Dakota officials have actively sought to attract power-intensive data centers, partly because the state generates a substantial amount of energy but sometimes lacks reliable means to export it. This strategic alignment was evident during the 2025 legislative session, where lawmakers opted against establishing a state siting process for large power users, instead increasing a financial guarantee for a proposed natural gas pipeline to $500 million over a decade. This pipeline, if built, is envisioned to power future data centers, a prospect Applied Digital supports.
Upon completion, Polaris Forge 2 is expected to create 200 full-time jobs. Harwood Mayor Blake Hankey anticipates minimal strain on local housing and services, given the proximity to Fargo, though he welcomes potential growth for his city. State and local leaders, including Governor Kelly Armstrong, have lauded the announcement, with Armstrong commending Applied Digital’s commitment to being a “positive corporate citizen” and its role in developing rural communities and strengthening the state’s economy.