Soluna and Applied Digital Plan Texas AI Data Centre

“We have said for a long time that the constraint in AI is energy access, not chips,” Soluna chief executive John Belizaire said on Wednesday. His company now has a partner willing to test that idea at a wind farm in the Texas Panhandle.

Soluna Holdings has signed a definitive agreement to form a jointly owned company with Applied Digital to develop “a planned 50 MW critical IT data center for AI and HPC” at Project Dorothy 3, near Silverton in Briscoe County, it said in a release. The venture has not been formed yet: closing depends on several conditions, including a local tax break, and is expected by the end of the year.

Applied would own 51% and bring the money

Under the agreement, Soluna is expected to put part of the Dorothy 3 site, including land and power-related project assets, into the new company, while Applied provides capital for development. After closing, Applied is expected to hold 51% and Soluna 49%. The release does not say how much Applied will invest or what the project will cost.

The conditions are substantial. They include approval of a tax abatement in Briscoe County, title policies, corporate approvals, and negotiating the venture’s operating agreement, leases and power agreements. Belizaire said Soluna looks forward to “completing the remaining steps, including the tax abatement process in Briscoe County”.

The site sits beside a 150 MW wind farm

Dorothy 3 is co-located with Briscoe Wind, a 150 MW wind farm, and is near Soluna’s Dorothy 1 and Dorothy 2 projects. Subject to final documents, Phase 1 is expected to draw power from both the wind farm and the grid, according to the release.

That fits Soluna’s pitch. The company builds data centres next to renewable plants to use surplus power, and has hosted Bitcoin mining as well as AI workloads. “We built Soluna to bring load to the generation, so the power would be ready when the demand arrived,” Belizaire said, calling Applied “a proven builder and operator of AI data centers”.

The would-be tenant is part of Applied’s group

The first customer lined up is close to home. ChronoScale, an accelerated compute company majority-owned by Applied, has signed a non-binding letter of intent to lease the planned facility. The release says the lease still needs definitive documents and there can be no assurance it will be signed on the terms in the letter, or at all.

The next step to watch is the Briscoe County tax abatement. Without it, the deal cannot close, and the companies are aiming to finish by the end of the year.