Why It Matters
A major international developer is proposing one of Kentucky’s largest industrial projects in decades at a shuttered steelworks site in Eastern Kentucky, raising questions about the state’s capacity to supply power and water to hyperscale facilities while local governments scramble to establish regulatory frameworks.
What Happened
Rubix Data Centers, a subsidiary of Barcelona-based Submer Group, has proposed constructing a hyperscale data center on the 425-acre former AK Steel mill site in Russell, Greenup County. The facility would consist of eight two-story buildings designed to house massive quantities of computer servers and networking equipment.
Missouri-based Gateway City Consulting approached Russell’s mayor in June to discuss the project on behalf of the developer. The announcement came as a surprise to local officials, who had not been previously informed of the proposal’s scope or timeline.
Concerned about potential community impacts, Russell city council passed a data center moratorium in June to allow time for review. A public meeting was held to discuss the proposal, and Mayor Samuel Simpson addressed community members in a July 10 letter, noting that he “wanted the city involved in evaluating the project, its potential benefits, and the protections the city would need before any path forward is considered.”
The project would compete for resources with a second hyperscale proposal in the region. TeraWulf, another data center developer, has proposed a competing facility in the Greenup and Boyd County industrial park that would require approximately half the electrical capacity of the Rubix project.
By the Numbers
$8-12 billion — total investment in computer infrastructure
2 gigawatts — electrical capacity of proposed facility, representing more than 10 percent of Kentucky’s summer electricity production
55 million gallons — annual water consumption projected for the data center
200 — permanent full-time jobs at operational capacity
$125,000 — average annual salary for permanent positions
Tens of millions of dollars — expected annual local property tax revenue
425 acres — size of the brownfield site
Zoom Out
Kentucky has positioned itself as an attractive destination for data center development. The state’s Republican-controlled legislature passed statewide sales tax breaks for hyperscale data centers to incentivize investment in the sector. However, recent legislative efforts to regulate data center impacts—sponsored by both Republicans and Democrats—failed to advance during the most recent session, leaving local governments without clear state-level guidance.
The Russell proposal reflects a national trend of technology companies seeking industrial sites in regions with lower operating costs and available land. Hyperscale facilities, which require enormous quantities of electricity and water, have become increasingly concentrated in areas where those resources are abundant and affordable. Kentucky’s affordable power grid and available brownfield sites make the state competitive, though projects of this magnitude raise infrastructure questions that few rural communities have previously faced.
Russell Water Company, which serves the municipality, produces more than 500 million gallons of drinking water annually. The proposed data center alone would consume approximately 55 million gallons yearly, representing a significant fraction of local water supplies—a concern that local officials and residents will likely scrutinize as negotiations proceed.
What’s Next
Russell’s moratorium on data center development provides a window for the city to evaluate the Rubix proposal and negotiate terms before any agreement is finalized. The developer and city officials are expected to continue discussions regarding electricity supply, water access, environmental protections, tax agreements, and job creation timelines. The outcome may influence how other Kentucky municipalities approach similar proposals as additional hyperscale facilities seek locations in the state.