CoreWeave breaks ground on $1.8B AI data center in Kenilworth - here's what it means for real estate and construction
CoreWeave has started construction on a nearly $1.8 billion, 250-megawatt AI data center at the former Merck campus on Galloping Hill Road in Kenilworth. The project is backed by a five-year, $250 million tax credit under the state's new Next New Jersey Program - AI, approved by the New Jersey Economic Development Authority (NJEDA).
The plan calls for a 392,600-square-foot facility: 108,100 square feet of new construction and a retrofit of 284,500 square feet within the building known as 11 NEST. The site is part of Onyx Equities' 2 million-square-foot Northeast Science & Technology Center (NEST), which CoreWeave purchased along with 27 adjacent acres in August for $322 million.
Timeline and scope
Construction began in mid-September. CoreWeave expects the data center to be operational in early 2027.
The company, backed by Nvidia and now public, reports a network of 33 purpose-built AI data centers across North America and Europe, with more on the way to meet demand for high-performance AI infrastructure.
Why this deal matters for developers and GCs
- Adaptive reuse is gaining momentum. Converting a former lab/manufacturing asset into high-density compute shows how life sciences campuses can be repositioned for AI infrastructure without starting from scratch.
- Power is the project driver. A 250 MW target requires early coordination with the utility, long-lead electrical gear (switchgear, transformers), and substantial backup generation. Expect multi-year interconnection and procurement schedules.
- Cooling strategies will define design and budget. Anticipate high-density cooling, water use considerations, and upgrades to existing mechanical systems. Permitting for water, noise, and emissions will be front and center.
- Trades and suppliers should plan for volume. Medium-voltage systems, generators, controls, structural reinforcement, and civil work will create sustained demand for local firms.
- Campus-scale planning pays off. Large parcels with existing roads, utility corridors, and security perimeters reduce sitework risk and accelerate phasing.
Incentives and program details
The $250 million award is the first under the Next New Jersey Program - AI. CoreWeave qualified for the maximum $50 million per year, issued over five years, within a 10-year commitment to remain in New Jersey and maintain jobs.
The project significantly exceeds program thresholds. The law requires at least $100 million of capital investment and 100 new jobs; CoreWeave's Kenilworth plan totals roughly $1.76 billion and 143 high-quality roles that surpass salary requirements tied to the county median.
The Next New Jersey - AI program is open through March 1, 2029, on a rolling basis subject to available credits. For program information, visit the New Jersey Economic Development Authority.
The deal structure: lease-to-own shift
CoreWeave initially announced a lease at 11 NEST in October 2024 with Onyx Equities, Machine Investment Group, and Pivot Real Estate Partners. In August, the company pivoted and acquired the facility and surrounding land for $322 million.
For investors, that move signals growing preference among AI operators to control mission-critical real assets. For sellers and campus owners, it underscores the premium buyers will pay for power-ready, scalable sites.
Regional ecosystem and workforce
State leaders have positioned AI as a growth sector. The Governor and Princeton University named CoreWeave and Microsoft as founding partners of a new AI Hub, supported by a $7.5 million CoreWeave investment and an additional $25 million committed to collaborations with New Jersey-based startups and research groups. Learn more about AI initiatives at Princeton University.
CoreWeave's Kenilworth project will create 143 innovation-focused jobs. That, combined with capital investment well above the minimum, reflects a strong push to anchor an AI cluster in the state.
What project teams should watch
- Utility interconnection timelines and substation work
- Phasing plans to bring 250 MW online
- Awards for EPC, MEP, civil, and specialty scopes (electrical, controls, structural)
- Permits tied to cooling, water, noise, and generator emissions
- Procurement of long-lead equipment and associated schedule buffers
Key takeaways for real estate and construction
- Former pharma and R&D campuses are prime candidates for data center conversions due to robust infrastructure and zoning history.
- State incentives are now material to site selection in the Northeast; expect more AI-data center announcements to follow this first award.
- Early design-assist with utilities and OEMs can de-risk power and cooling-often the critical path on AI facilities.
- Control of land and power trumps everything. The lease-to-acquisition shift indicates long-term owner-operator strategies will be common in AI compute.
Upskill your team
If you're building, leasing, or operating data centers-or repositioning campuses for AI-ongoing learning helps teams bid smarter and deliver with fewer surprises. Explore role-specific training here: AI courses by job.
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