Soluna Holdings and affiliates of Applied Digital have signed an agreement to form a jointly owned company that would develop a planned 50-megawatt data center for artificial intelligence and high-performance computing (AI/HPC) at Project Dorothy 3. That is Soluna's site near Silverton in Briscoe County, Texas, next to the Briscoe Wind Farm. Soluna's Form 8-K gives the event date as Oct. 20, 2026. Soluna announced the deal the next day in a press release dated Albany, N.Y., Oct. 21.

The deal is not yet closed. The filing makes it depend on several conditions. One is a local government decision: the 8-K lists the occurrence of a "Tax Abatement Vote," and the press release describes it as approval of a tax abatement in Briscoe County. Briscoe County is a rural Panhandle county whose officials were quoted in July discussing abatements for a data center plan.

What the filing commits each side to

The 8-K describes a Subscription Agreement, not a merger or an asset sale. At closing, a Soluna affiliate (the "Soluna Investor") would subscribe for 49% of the common units of a new Project Company. An Applied Digital affiliate (the "Applied Investor") would subscribe for the other 51%. The 8-K says the Project Company would own the initial phase of a facility called "Dorothy 3A," described as approximately 75 megawatts of gross capacity, or 50 megawatts of Critical I.T. capacity.

The two sides pay in different forms, according to the filing:

  • Soluna's side contributes a Ground Sublease. The filing gives it an attributed value of $18,750,000. Soluna's newsroom announcement describes the contribution as a portion of the Dorothy 3 site, including land and power-related project assets.
  • Applied's side contributes cash of $19,515,306. Under the 8-K, that amount is subject to a dollar-for-dollar credit for amounts Applied or its affiliates pay before closing for certain development work at the site or for long lead-time equipment. The 8-K also says development work has begun at the site and is being paid for by Applied.

The filing says Soluna Investor's and Applied Investor's obligations are guaranteed, by Soluna and by an Applied guarantor entity respectively. It sets an "Outside Date" of on or before Dec. 1, 2026, which the filing says can be extended once by 30 days if only the tax abatement vote is outstanding, or by 10 days if only the title policy is outstanding, but never beyond Dec. 31, 2026. The press release separately says the parties expect to close by the end of the calendar year.

Power: wind plus grid

The press release says Dorothy 3 is co-located with Briscoe Wind, a 150-MW wind farm. Phase 1 is described as 50 MW of critical IT load, meaning the power available to computing equipment rather than total site demand. The release says that, subject to definitive documentation, Phase 1 is expected to draw power from both Briscoe Wind and the grid. It does not say how the load would be split between the two, and the filings do not describe any later phases.

Power agreements are among the documents still to be negotiated, according to the press release. So the commercial terms for how the facility buys electricity from the wind farm and from the grid are not yet public.

Soluna CEO John Belizaire said in the release, "We have said for a long time that the constraint in AI is energy access, not chips."

The tenant question

The announcement names a possible tenant. ChronoScale Holdings Corporation (Nasdaq: CHRN), which the press release describes as majority-owned by Applied Digital, has signed a non-binding letter of intent to lease the planned facility; the release's subhead calls it a triple-net lease. Under a triple-net lease, the tenant generally pays property taxes, insurance and maintenance on top of rent. The press release says there can be no assurance that a definitive lease will be entered into on the terms contemplated by the letter of intent, or at all. No definitive lease has been announced, and definitive leases are listed among the open items that must be negotiated before closing.

The local picture in Briscoe County

The project is not Soluna's first near Silverton. In a July 29 report by KVII ABC 7 Amarillo, Soluna regional lead Karl Shinn said, "We were able to move in and build 98 megawatts worth of renewable computing" just south of Silverton off Highway 207. Shinn also said Soluna now owns the existing 150-megawatt wind farm as a permanent power source for a data center.

The KVII report explained why the county was weighing a tax break. Briscoe County Judge Rank Cogdell told the station that a bitcoin mining facility had "filled in a gap of when we lost our abatement, our pilot money from the wind farms." KVII reported that an abatement is a tool that helps put safeguards in place to protect the county when a large industrial project arrives. Precinct 3 Commissioner Danny Francis told the station that "the whole county is struggling at this time."

KVII reported that the next commissioners' meeting at the time was set for Monday, Aug. 10, and that county officials were working with representatives of a data center to set up a meeting or town hall forum at a later date so residents could ask questions. None of the sources reviewed for this article say whether the commissioners have since approved an abatement or what terms one might carry. The Oct. 21 press release still lists abatement approval as a condition to closing.

Conditions still open

The press release lists these conditions to closing, among others:

  • Approval of a tax abatement in Briscoe County
  • Receipt of title policies
  • Corporate approvals
  • Negotiation of the Project Company's operating agreement
  • Negotiation of definitive leases
  • Negotiation of power agreements

Several of these are documents that the press release describes as still to be negotiated and executed. The 8-K says the operating agreement (the LLC Agreement) would set out the terms of the ownership, management and operation of the Project Company. The filings do not give a construction schedule, a total project cost, a job count, or the facility's acreage or water use.

What Happens Next

The next step named in the sources is approval of a tax abatement by Briscoe County, which the press release names as a condition to closing. The sources reviewed for this article do not give a date for a commissioners' vote. Under the Subscription Agreement described in Soluna's 8-K, closing is expected on or before the Dec. 1, 2026 Outside Date, with limited extensions that cannot go past Dec. 31, 2026. The press release says the parties expect to close by the end of the calendar year. Before then, the parties also must obtain title policies and corporate approvals and finish negotiating the operating agreement, definitive leases and power agreements. ChronoScale's lease remains a non-binding letter of intent until a definitive lease is signed.

Sources