Soluna and Applied Digital Agree on 50-Megawatt Data Center in Texas
Key Facts
On October 20, 2026, Soluna disclosed a subscription agreement to form a joint venture with Applied Digital to develop a planned data center with 50 megawatts of critical IT capacity at the Dorothy 3 site in Briscoe County, Texas. The agreement covers the initial phase, known as Dorothy 3A, and does not mean the center has entered construction or that the deal has closed. The planned project is near Silverton, while some development work began at Applied’s expense before closing, according to Soluna’s filing with the U.S. Securities and Exchange Commission. Closing remains subject to multiple conditions, including a vote on a tax abatement and issuance of a leasehold title insurance policy. The agreement therefore sets a framework for a future project, while its approvals and operating arrangements remain decisive to its completion.
The initial phase has approximate total capacity of 75 megawatts, of which 50 megawatts are allocated to critical IT capacity, according to the filing. This distinguishes the facility’s overall capacity from the capacity available to IT equipment; the two figures describe different aspects of the project. The agreement covers Dorothy 3A, not the site’s full potential expansion. The center is planned to serve AI and high-performance computing loads, according to Soluna’s announcement. The planned site is adjacent to a wind farm, but the first phase is expected to draw power from both the farm and the grid, subject to final documents. That makes power arrangements part of the conditions still being finalized.
The agreement outlines a contribution structure that divides the roles of the two companies through the joint venture. Soluna’s investor will receive a 49% stake in exchange for providing the land lease, which the agreement assigned a value of $18,750,000, along with a holding company contribution. In turn, an Applied entity is committed to a cash contribution of $19,515,306. That contribution is subject to a credit for eligible development and equipment costs incurred before closing, according to the SEC filing. The arrangement thus combines Soluna’s site-related contribution and assets with cash funding from an Applied entity. The filing specifies the Soluna-affiliated investor’s stake, but does not state the other party’s ownership percentage in the facts presented here.
Closing does not follow automatically from signing the subscription agreement; conditions include a vote on the tax abatement, internal approvals, issuance of a leasehold title insurance policy and negotiation of transaction agreements. The filing said some development work had already begun, with Applied bearing the cost before closing. The start of that work does not establish that construction of the data center building has begun, nor does it resolve the remaining conditions. Among the operational matters still requiring final documents are the lease and power arrangements. The project therefore remains in a conditional development phase, even as preliminary work has begun at the site.
The filing expects closing on or before December 1, 2026. If the tax abatement vote alone remains unresolved, the date may be automatically extended by 30 days, while outstanding title documents alone allow for a 10-day extension. No extension may push the deadline beyond December 31, 2026. These dates define the window available to satisfy the agreement’s conditions, without guaranteeing that closing will occur. In trading on October 23, 2026, Soluna shares closed at $0.5501, and Applied Digital shares closed at $18.25. Those prices alone do not measure how the two stocks changed in response to the announcement.
The deal comes amid a broader trend covered by EL7, which previously tracked bitcoin mining companies’ move toward AI infrastructure and revenue diversification. In this project, that trend is tied to developing a data center at a site adjacent to a wind farm, with expected reliance on power from both the farm and the grid. The project’s transition from agreement to execution depends on completing the closing conditions and final documents. The expected date is December 1, 2026, with possible extensions within the limits set out in the filing and through December 31, 2026.