Soluna and Applied Digital Plan 50 MW Wind-Linked Texas AI Site

Soluna Holdings said on October 21, 2026 it signed a definitive agreement with Applied Digital to form a jointly owned company for a planned 50 MW critical IT data center in Briscoe County, Texas.

The site is Project Dorothy 3, Soluna's land near Silverton, next to the 150 MW Briscoe Wind Farm. After closing, Applied Digital would hold 51% of the project company and Soluna 49%. Soluna's 8-K, which dates the agreement October 20, values its contributed ground sublease at $18.75 million. Applied puts in $19,515,306 in cash, credited for site work it funds before closing, which the filing says has already begun.

The 50 MW is critical IT capacity, the power available to computing equipment, not the utility connection or the campus total, neither of which has been published. Phase 1 is expected to draw power from both the wind farm and the grid, subject to definitive documentation. The wind-to-grid split therefore decides how firm the supply is: the wind farm's 150 MW is a nameplate rating, not what it would deliver in a given hour.

Who the tenant is

ChronoScale Holdings, which Applied Digital majority-owns, signed a non-binding letter of intent for a triple-net lease of the facility. Soluna's release says no definitive lease is assured. Applied would thus own 51% of the project company and control the intended tenant; the 8-K lists ChronoScale's lease approval as a closing condition.

Neither Soluna's release nor its 8-K names an end customer. ChronoScale's 10-Q, filed October 14, says it signed a GPU services agreement with Microsoft on August 6 for about 50 MW of AI compute capacity at an unnamed Texas facility, with deliveries expected in February and March 2027. It also says ChronoScale signed a term sheet on October 11 with its parent for a $50.0 million tenant fit-out advance and expects to lease from a joint venture being formed between Applied and a third party with site control. That fits Dorothy 3, but no filing names the site, and the two 50 MW figures use different bases: compute capacity versus critical IT.

What has to happen before closing

Closing is expected on or before December 1, 2026. That outside date moves once by 30 days if only the Briscoe County tax abatement vote is outstanding, or by 10 days if only title work is, and never past December 31, 2026. Other conditions include the operating agreement, a leasehold title policy and corporate approvals; Soluna's release adds definitive lease and power agreements. If the deal ends without closing, Soluna must reimburse 80% of Applied's funded costs, up to $45 million. At closing Soluna is also expected to issue Applied or an affiliate a seven-year warrant for up to 7,644,444 shares at $0.74.

Soluna bought the Briscoe Wind Farm in April for $53 million and closed on 397 acres for Dorothy 3 in August, REBusinessOnline reported, citing a potential 300 MW for the campus, so this 50 MW is the first phase.

What is not confirmed yet

Soluna's release and filing do not give the wind-to-grid split, a power purchase agreement, the interconnection size, the grid operator or a project cost. Blockspace reported on October 22 that the analyst firm Rosenblatt, which disclosed advisory work for Soluna, assumed a build cost of $11 million per MW, or $550 million; that is an analyst assumption, not a company figure. Blockspace also relayed that management targets a signed lease by December 1 and service in the second quarter of 2027, dates Soluna's release does not give.

Texas Gov. Greg Abbott told state agencies on September 21 to hold data center approvals until audits by ERCOT, the state grid operator, and the Texas Water Development Board finish, the Texas Tribune reported, and as Voltgrid reported, the state environmental agency suspended 17 data center stormwater permits on October 20. The companies have not said how that pause bears on Dorothy 3. As of October 25, no county vote, signed lease or closing had been reported.