Ellendale’s data-center boom is turning a neglected farm town into a test case for whether AI money can truly revive rural America.
Quick Take
- Applied Digital is building a major high-performance computing campus in Ellendale, North Dakota.
- The project has already brought construction work, local spending, and a sharp rise in sales-tax revenue.
- Town leaders say the new tax money can help pay for streets, a senior center, public safety, and other deferred needs.
- The boom has also put pressure on housing, roads, and local services as workers arrive.
A Major Project Reaches a Small Town
Applied Digital has made Ellendale the center of a large artificial intelligence infrastructure buildout. The company announced the Ellendale high-performance computing data center in December 2024, and reporting describes Polaris Forge 1 as an approximately $11 billion project that will cover about 2.5 million square feet and deliver 400 megawatts of computing power. Local and state reporting says the work is already reshaping daily life in the town of about 1,100 people.
The scale matters because Ellendale is not getting a modest upgrade. It is getting a project large enough to change the town’s tax base, land use, and labor market. Reporting says construction has drawn about 2,000 workers, and company-linked plans point to a long-term operating workforce measured in the hundreds, not dozens. That kind of footprint is rare in rural North Dakota and helps explain why the project has drawn so much attention.
Money Is Flowing Into Town Fast
The clearest sign of change is tax revenue. Before the data center, Ellendale collected about $400,000 a year in sales tax, according to Mayor Don Flaherty. In the first seven months of 2026, the town brought in $3.5 million. Flaherty said the new money could help repave streets, renovate the senior center, build a public-safety complex, add walking trails, and restore the historic opera house.
Residents and officials also point to wider economic spillovers. Reporting says Applied Digital grants helped the school district buy computers, improve the teachers’ lounge, and renovate a playground. The project has also supported new housing, including single-family rental homes and apartments for incoming workers. Those gains are the kind local leaders often hope for when a big employer arrives: more spending, more construction, and a broader base to support public services.
Growth Brings Strain Along With Opportunity
The same boom that is boosting town finances is also creating stress. Local reporting says construction workers and related demand have tightened the housing market and pushed up pressure on roads and services. One account says the company-backed housing push was meant to ease that problem, but the need itself shows how fast the project has outgrown the town’s existing supply of homes and infrastructure.
Done well, the AI boom is going to really help Americans.
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Ellendale, North Dakota, offers one striking example. A massive new AI data center is breathing life into the small community, bringing construction jobs, new tax revenue, and the prospect of long-term investment to…— Billc🇺🇸🇮🇱🏴 (@Billc1241) August 10, 2026
That mix of gain and strain is why Ellendale has become a broader symbol of the AI buildout. Supporters see a rare rural win: private capital, public revenue, and a chance to keep a small town alive. Skeptics see a familiar pattern: outside firms promise lasting benefits, while towns absorb the short-term costs of growth. For now, Ellendale stands as a clear example of both sides of that argument, with the real impact still unfolding.
Sources:
townhall.com, ir.applieddigital.com, facebook.com, sfchronicle.com
