- Soluna Holdings and Applied Digital Corp disclosed a definitive agreement on October 21, 2026 to jointly build a 50-megawatt AI and HPC data center called Project Dorothy 3 in Briscoe County, Texas
- Applied Digital will own 51 percent of the new project company and contribute about $19.5 million in cash, while Soluna owns 49 percent and contributes a ground sublease valued at $18.75 million
- A company called ChronoScale Holdings, majority-owned by Applied Digital, has signed a non-binding letter of intent to lease the facility once it is built
Soluna Holdings, a company that began as a bitcoin mining operator and has increasingly repositioned itself around power infrastructure more broadly, disclosed on October 21, 2026 that it has signed a definitive agreement with Applied Digital Corp to jointly build a new artificial intelligence and high-performance computing data center. The project, named Project Dorothy 3, will sit in Briscoe County, Texas, next to Soluna’s existing 150-megawatt Briscoe Wind Farm, giving the new facility direct access to an already-built renewable power source.
Under the joint venture structure, Applied Digital will hold 51 percent ownership of the new project company and contribute approximately $19.5 million in cash, net of certain pre-closing cost credits, while Soluna holds the remaining 49 percent and contributes a ground sublease for the project site valued at $18.75 million. The facility itself is sized at 50 megawatts, a meaningful but not massive scale within the broader wave of AI-focused data center construction underway across the United States.
ChronoScale Holdings, a company majority-owned by Applied Digital, has already signed a non-binding letter of intent to lease the completed facility, giving the joint venture a likely anchor tenant lined up even before construction is complete, though the arrangement remains non-binding and could still change before a final lease is signed. As part of financing the deal, Soluna will issue Applied Digital a seven-year warrant covering 7,644,444 shares at a $0.74 strike price, with a registration statement for those shares due within 30 days of the deal’s closing.
The agreement includes a termination provision that requires Soluna’s subsidiary to reimburse 80 percent of Applied Digital’s funded costs, capped at $45 million, if the deal falls through, an obligation that Soluna itself guarantees. The companies are targeting a closing by December 1, 2026, with an outside date of December 31, 2026 if closing takes longer than expected. Soluna Chief Executive Officer John Belizaire said the companies have long argued that the real constraint in artificial intelligence is energy access rather than chip supply, framing the deal as a natural extension of Soluna’s existing power infrastructure into a new use case.
The partnership reflects a broader trend among bitcoin mining companies, which often already control significant power infrastructure and grid connections, pivoting at least part of that infrastructure toward hosting AI and high-performance computing workloads instead of, or alongside, bitcoin mining itself, as AI compute demand has outpaced available power capacity in many markets. The announcement, filed with the SEC, did not disclose specific revenue projections for the completed facility.
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