Soluna Holdings agrees to 50 MW Texas AI partnership with Applied Digital

A planned 50 MW AI data centre in the Texas Panhandle has a signed partnership agreement, while its tenant lease and power contracts remain unfinished. Soluna Holdings, Inc. NASDAQSLNH, an Albany-based developer of computing facilities beside renewable generators, announced the Dorothy 3 partnership on Wednesday.

Applied Digital Corporation NASDAQAPLD, a U.S. developer and operator of large-scale AI data centres, is expected to own 51 per cent of the project company after closing. Soluna would retain 49 per cent, contributing land and power-related assets while Applied supplies development capital, according to Soluna's announcement.

Soluna shares closed at US$0.58 on Nasdaq at Tuesday's 4:00 p.m. EDT close, according to NASDAQSLNH. Applied Digital closed at US$19.33 at Tuesday's 4:00 p.m. EDT Nasdaq close, according to NASDAQAPLD. Both prices predate Wednesday's announcement.

The companies expect the transaction to close by the end of 2026, subject to conditions including a county tax abatement and definitive agreements. Soluna's release gives no construction completion, energization or first-revenue date, and the intended tenant has signed only a non-binding letter of intent.

Applied Would Hold 51 Per Cent

Soluna expects to contribute a portion of its Dorothy 3 development site near Silverton in Briscoe County, Texas. The announced contribution includes land and power-related project assets, rather than a stated cash investment.

Applied's expected capital contribution has no dollar amount in the announcement. The release also gives no total construction budget, funding schedule or allocation of cost overruns, so the ownership percentages do not establish each partner's ultimate cash exposure.

Closing requires approval of a tax abatement in Briscoe County, receipt of title policies and corporate approvals. The parties must also negotiate and execute the project company's operating agreement, definitive leases, power agreements and other documents. A signed transaction agreement therefore precedes several contracts needed to develop and operate the facility.

Dorothy 3 would sit beside Briscoe Wind, a 150 MW wind farm, near Soluna's existing Dorothy projects. The proposed first phase is specified as 50 MW of critical IT capacity. Soluna says it would draw electricity from both the wind farm and the grid, subject to definitive documentation; the wind farm's generating capacity is a separate measure from the planned computing load.

"Partnering with Applied at Dorothy 3 puts that strategy to work: our site and wind power, combined with a proven builder and operator of AI data centers," Soluna chief executive John Belizaire said in the release.

ChronoScale Has Signed A Non-Binding Letter

ChronoScale Holdings Corporation NASDAQCHRN, an accelerated computing platform for demanding AI workloads, is the prospective tenant. Soluna describes the proposed arrangement as a triple-net lease, but says definitive documentation remains to be negotiated and offers no assurance that a lease will be signed.

Applied reported approximately 97 per cent ownership of ChronoScale when the cloud business separation closed on May 5. Soluna's Wednesday release continues to describe ChronoScale as majority-owned by Applied.

ChronoScale's Oct. 15 results disclosed US$328.2 million in aggregate prepayments under existing customer contracts after its August quarter-end. That release did not identify those receipts as a Dorothy 3 funding commitment. Soluna's partnership announcement discloses neither proposed rent nor lease duration, leaving the project's revenue economics unspecified.

Applied Reported 250 MW Operating In October

Applied's Oct. 7 results provide an operating benchmark for its development role. The company said it reached 250 MW of fully operational critical IT load at its Polaris Forge 1 campus on Oct. 1. That is operating capacity at a separate North Dakota development, while Dorothy 3 remains a planned Texas project.

Core Scientific, Inc. NASDAQCORZ, a data centre operator repurposing mining facilities for high-density colocation, reported 395 MW billing at June 30. Its July 28 results separately reported US$136.7 million of colocation revenue for the June quarter, illustrating the operating measures that can be checked after construction.

Mugglehead's earlier coverage of capacity delivery and billing followed the distinction between construction progress and revenue. For Dorothy 3, the announcement is earlier in that sequence: the tenant lease and power agreements remain closing conditions.

Read more: Core Scientific reports another 48 MW delivered at Dalton campus

The next stated transaction milestone is closing by Dec. 31, 2026. That timetable depends on the tax abatement and remaining agreements; Wednesday's announcement supplies no dated milestone for when the planned 50 MW facility would begin earning revenue.