Hut 8 Signs $9.8 Billion AI Data Center Lease in Texas

What happened

Hut 8 secured a second 15-year triple-net lease worth $9.8 billion at its Beacon Point AI data center campus in Nueces County, Texas. The agreement covers 352 megawatts of information technology capacity and fully commercializes the one-gigawatt campus. The same high-investment-grade tenant that leased the first phase doubled its contracted IT capacity to 704 megawatts total. The lease includes a 3% annual base-rent increase and three five-year renewal options. Hut 8 will develop a second 352-megawatt AI factory based on NVIDIA's DSX reference architecture, supported by 500 megawatts of utility capacity. The company expects the agreement to generate cumulative net operating income of $9.8 billion, averaging approximately $655 million annually after stabilized operations. Initial delivery of the second phase's first data hall is expected in the second quarter of 2028, with initial campus energization scheduled for the first quarter of 2027.

Why it matters

The deal validates Hut 8's strategic pivot from Bitcoin mining to AI infrastructure and its power-first development approach. The Beacon Point campus now has a combined base-term contract value of $19.6 billion across both phases, potentially rising to $50.2 billion if all renewal options are exercised. Across both Beacon Point and the River Bend facility, Hut 8 has 949 megawatts of contracted capacity backed by approximately 1,330 megawatts of utility capacity. The company's AI data center portfolio now carries an aggregate base-term contract value of $26.6 billion with projected average annual net operating income exceeding $1.75 billion. All contracted capacity is leased to or financially supported by investment-grade counterparties, providing long-term revenue predictability. The tenant's decision to double its footprint demonstrates strong customer confidence in Hut 8's execution capabilities.

Bigger picture

The agreement reflects the broader transformation among publicly listed Bitcoin miners seeking stable, long-term revenue from AI infrastructure rather than volatile cryptocurrency mining operations. Companies like IREN, Terawulf, Cipher Mining, and Bitfarms have similarly pivoted toward high-performance computing and AI data centers, leveraging existing power infrastructure and data center expertise. Demand for large-scale AI computing capacity continues to surge as AI developers require massive energy resources and reliable utility connections. Hut 8's approach of securing large-scale energy capacity before matching sites with computing customers positions the company to serve AI, high-performance computing, and other energy-intensive markets. The company secured a December partnership with Anthropic, Fluidstack, and Google backing to build up to 2.3 gigawatts of AI data center capacity in the U.S., further demonstrating the scale of infrastructure investment flowing into AI compute.

What to watch

Monitor the initial energization of Beacon Point scheduled for the first quarter of 2027 and the delivery of the second phase's first data hall in the second quarter of 2028. Watch whether Hut 8 successfully replicates the Beacon Point development and commercialization model across its broader project pipeline. Track whether the company secures additional lease agreements with investment-grade counterparties and whether existing tenants exercise renewal options that could increase total contract value. Observe how Hut 8 balances capital allocation between AI infrastructure development and any remaining Bitcoin mining operations as the industry continues shifting toward compute-focused business models.