What the Firebird AI Data Center Means for Armenia’s Environment

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Firebird AI launched its landmark data center in early August in Hrazdan, an industrial town northeast of Yerevan. With an initial capacity of 18 megawatts (MW), the project is set to expand, reaching a peak capacity of 400 MW in the next year. The crown jewel of Armenia’s expanding tech sector, the Firebird data center will position Armenia as a leading regional AI hub, but its extraordinary energy demands raise questions about the environmental costs of that ambition.

While Armenia has largely welcomed this investment, elsewhere the tide has turned on AI data centers as the extent of their environmental impact becomes increasingly apparent. New York state recently imposed a moratorium on data center construction, while Ireland and the Netherlands have introduced similar restrictions.  

By contrast, the Armenian government appeared to have rolled out the red carpet, providing unprecedented diplomatic and fiscal support during the early stages of the approval process. “Before this you would have to go back to the Soviet Union to see such investments in technology,” says Alen Amirkhanian, director of the Acopian Center for the Environment at the American University of Armenia. 

The staggering scale of the $500 million investment is matched only by the size of the facility itself. With a proposed full capacity of 400 MW, the data center would rank among one of the world’s largest. For a country with limited preexisting data center infrastructure, this represents something of a leap into the unknown.  

Such is the scope of the Firebird facility, that it will completely reshape Armenia’s existing energy usage. According to Harut Martirosyan, the Chief Technology Officer of Firebird AI, the data center will consume roughly 35% of Armenia’s total energy, once fully completed.  

While this increase in consumption may well increase electricity generation, Firebird maintains that Armenia’s energy excess can absorb this sharp increase in demand. With a surplus of energy stemming from a diverse range of sources, Armenia is seemingly well-positioned for data center development. “The excess in energy is driving the investment,” says Martirosyan. “We still have space for one extra data center half the size of the second phase.” 

While this represents a new wave of development, Armenia boasts a recent history of technological innovation. During the Communist era, Armenia emerged as a regional electricity hub, supplying energy to neighboring Soviet republics. These integrated energy systems fragmented amid the collapse of the Soviet Union, causing Armenia to slow down production. “Though we may have stopped production, the installed capacity is still there,” says Ara Marjanyan, a national energy expert with the United Nations Development program.“It’s completely operational.” 

Armenia already produces more electricity than it can always use. Although the country exports 1.5 billion kilowatt-hours of electricity annually, generation is often curtailed once the transmission lines reach capacity. By making use of excess electricity, Firebird hopes to reduce the need for additional generation, while also strengthening the overall functionality of the grid.  

As Armenia seeks to normalize relations with its traditional adversaries, Turkey and Azerbaijan, energy exports could prove pivotal in the normalization process. In January, Prime Minister Nikol Pashinyan announced plans to synchronize Armenia and Azerbaijan’s energy systems as part of the broader TRIPP project. While both energy exports and the data center bolster regional connectivity, they could strain Armenia’s energy supplies in the long-term. “Increased energy exports could be a risk,” warns Marjanyan. “Data centers are not the only potential drivers of demand.” 

Armenia’s unique energy situation distinguishes it from other countries where power-intensive data centers have placed the grid under strain. In Ireland, data centers now account for over 20% of the country’s total energy use. Just last month, the UN released a report citing Ireland as a “cautionary tale” in data center development.   

Much like Armenia today, Ireland previously branded itself as an emergent technology hub, welcoming a wave of data center investment in the 2010s. With nearly 90 data centers across the country, Ireland has approximately 10 times more data centers per capita than the European average. Such is their demand for energy that data processing now accounts for 23% of Ireland’s total electricity consumption, putting further strain on the national power grid. Though Armenia’s diverse energy portfolio sets it apart, Ireland’s blind embrace of AI investment should serve as a warning about the dangers of overzealous data center development.  

Nonetheless, rapid growth within the renewable sector represents perhaps the biggest change in Armenia’s national energy portfolio. Advances in solar power have further diversified Armenia’s energy mix, accounting for over 16% of national electricity production in 2025. Meanwhile, the nearby Sevan-Hrazdan cascade continues to generate hydro-electric power, providing the data center with a crucial source of renewable energy. 

In line with its infrastructure strategy, Firebird has committed to a transition toward greater renewable energy use. “The cleaner the grid, the better the options,” says Silvie Nshanyan, a sustainability consultant with Firebird. “There might be a further solar energy buildout in the long term.” 

Given the intensity of their energy demands, data centers require a continuous and uninterrupted supply of high-quality electricity. Meanwhile, Ara Marjanyan questions Firebird’s assurance that Armenia’s expanding solar sector can meet the increased demand for energy. “Solar is indispatchable which means you cannot rely on it all year round,” he says. “Data centers need guaranteed power which solar energy unfortunately cannot provide.” 

In place of solar energy, the data center will rely heavily on both natural gas and nuclear energy as sources of guaranteed power. Natural gas accounts for over half of Armenia’s total energy supply, an essential component of the country’s energy mix. 

The proximity of the Hrazdan thermal power plant will guarantee the supply of uninterrupted power to the data center. With ownership shared between billionaire oligarch Samvel Karapetyan and Russian state energy giants Gazprom, the Hrazdan plant relies heavily on imports of discounted Russian gas. Amid recent strained relations with Russia, rising energy demands could further increase Armenia’s dependency on imported gas, undermining overall energy security. “The reliance on Russian gas is definitely a concern,” admits Nshanyan. “Though the government is pursuing an active strategy to diversify.” 

Meanwhile, Armenia’s direct access to nuclear power further bolsters the country’s diverse energy portfolio. Around the world, tech companies are increasingly partnering with nuclear operators in order to supply power-hungry data centers. As part of its expanding AI operations, Microsoft signed a power purchase agreement in 2024 which helped resurrect a disused nuclear plant in Pennsylvania. “These big data centers have become the big drivers of this new nuclear power renaissance,” echoes Marjanyan. 

Aside from energy, the issue of water consumption represents one of the primary environmental concerns surrounding AI data centers. According to the United Nations Economic Commission for Europe, a 1 MW data center, using traditional evaporative cooling methods, can consume up to 25.5 million liters of water per year. 

Nonetheless, Firebird’s decision to install a closed-circuit water system has mitigated most environmental concerns about water consumption. Harut Martirosyan, the CTO of Firebird AI, outlined that the facility will only require 150 tons of water for cooling purposes. According to him, the closed loop system guarantees that the same amount will be required even when the data center increases capacity during phase 2. With Armenian households using roughly 68 tons of water per person each year, Firebird’s water consumption represents a mere drop in the proverbial ocean.  

Beyond resource consumption data centers can also present a myriad of local environmental  risks. According to Firebird, they identified the Hrazdan site as low risk in terms of environmental impact. “We selected a greenfield site that does not disrupt the local environment,” says Silvie Nshanyan.  

Similarly, the proximity to the thermal power plant as well as the availability of preexisting power lines distinguished the Hrazdan site from other potential locations. The town wears the legacy of its industrial past with large smokestacks looming over the otherwise largely rural landscape.  

Local environmental activists largely support the project, despite learning about the plans from the news rather than direct consultation. “Hopefully it encourages skilled workers to move to the area,” says Movses Manukyan, a member of the Healthy Hrazdan civic initiative. “Though we hope to participate in the environmental monitoring of the data center in the future.” 

The rapid pace of the planning process seems to have taken the local activists by surprise. “It usually takes something like this much longer to be approved,” says Arsen Arsenyan, a local environmental activist in Hrazdan. “It seems there was a big incentive to get this over the line.” 

Historically, weakness in Armenia’s environmental regulations have paved the way for harmful infrastructure projects. For example, in the 2010s the controversial Amulsar Gold Mine in Jermuk received environmental approval despite widespread local objection, sparking concerns about the validity of the environmental assessment.  

However, a 2023 law has expanded public participation in the assessment process, improving accountability and transparency. “In the past it has been hard for Armenia to fully govern its resources, especially when it comes face to face with international investments,” says Alen Amirkhanian of the Acopian Center. “I think it’s time for Armenia to think more strategically.” 

Though the data center has already begun operating, Firebird continues to seek approval for the second and third phases of the project. According to a statement from the Ministry of Environment, Firebird submitted the environmental impact assessment (EIA) for the expansion on May 19. They subsequently withdrew the application only a month later on June 19.  

Though the EIA for the expansion has not been finalized, construction is set to begin in 2027.  

“Site permitting for the expanded phase is currently in process,” says Nshanyan. “We can’t be idealists; we have to do what’s best within our operational constraints.” Nonetheless, Firebird has promised to publish their carbon emissions at the end of each year.  

Though founded and headquartered in Silicon Valley, Firebird AI retains a strong connection to Armenia. “This project puts Armenia directly in the spotlight and opens up a whole new market,” says Martirosyan. “There is definitely an element of patriotism, that’s why we built it here.” 

Though Armenia’s emergence as a regional AI hub poses some potential risks, Firebird remains adamant that this development will not come at the cost of the country’s environmental integrity.

“This is our country, we treat this as our home,” emphasizes Martirsoyan. “It’s not some junkyard for data centers.” 

It Has to Be Said

Environment