CoreWeave Signs $10.4B Lease for Galaxy Digital Texas Data Center

What happened

Galaxy Digital announced that its Galaxy Helios Data Centers II subsidiary priced $3.507 billion of senior secured notes due 2031 with a 9.875% interest rate. The private offering will help finance development of Helios Phase II, an AI data center project on approximately 260 acres in Dickens County, Texas. The project is designed for 400 megawatts of utility capacity and 260 megawatts of critical IT capacity across two buildings housing eight data halls. CoreWeave has signed a 15-year lease committing to the full 260 megawatts of critical IT load, with $10.4 billion in minimum contracted lease payments. The facility is expected to begin generating rent in the second quarter of 2027 with a 13.7% starting monthly recurring revenue yield on cost. The lease includes annual rent escalators of 3% to 5% depending on inflation. The notes will amortize at 4% annually starting at least 10 months after project completion, with semiannual interest payments beginning February 2027. The offering is expected to close July 28, 2026.

Why it matters

This transaction directly supports CoreWeave's expanding AI cloud infrastructure by securing large-scale data center capacity under a long-term contract. The 15-year lease with $10.4 billion in minimum payments provides CoreWeave with guaranteed access to 260 megawatts of computing capacity, critical for meeting growing demand from AI workloads. The deal demonstrates CoreWeave's ability to lock in infrastructure well ahead of commissioning, with rent generation starting in 2027. The contracted capacity represents a significant portion of CoreWeave's infrastructure footprint and underpins its service delivery commitments. For investors, the transaction highlights CoreWeave's strategic partnerships and its role as an anchor tenant in major AI infrastructure projects. The $1 billion in expected annual revenue for Galaxy Digital from the CoreWeave contract underscores the scale and financial materiality of this relationship. The lease structure with built-in escalators provides some inflation protection for both parties.

Bigger picture

The financing is part of a broader surge in AI infrastructure investment, with developers raising $28 billion through U.S. junk bond offerings in 2026 to fund data center projects. Galaxy Digital's Helios campus has regulatory approval for up to 1.6 gigawatts of power capacity and has already leased 800 megawatts of capacity, all to CoreWeave. This concentration reflects CoreWeave's aggressive capacity acquisition strategy as AI cloud providers race to secure power and computing resources. The partnership model-where specialized infrastructure developers build facilities with long-term anchor tenants-is becoming a standard approach for scaling AI data centers rapidly. Galaxy previously secured a $1.4 billion project financing facility in 2025 for the initial Helios phase, and the broader campus could eventually support up to 3.5 gigawatts of capacity. The scale and structure of these deals signal growing institutional confidence in the durability of AI compute demand, though they also create significant concentration risk for CoreWeave if AI workload growth slows or customer demand shifts.

What to watch

Monitor whether construction on Helios Phase II begins on schedule in 2027 and whether the facility meets its targeted second-quarter 2027 rent commencement date. Track CoreWeave's utilization of the committed 260 megawatts once operational, as high utilization would validate the aggressive capacity commitments. Watch for any updates on Galaxy Digital's ability to secure additional tenants or expand the Helios campus toward its 3.5-gigawatt potential capacity. Keep an eye on whether CoreWeave extends or expands its lease arrangements with Galaxy Digital beyond the initial 15-year term. Any changes in AI infrastructure financing conditions or junk bond market appetite could affect future phases of similar projects. Finally, observe whether CoreWeave diversifies its data center partnerships or continues concentrating capacity with a few large providers like Galaxy Digital.