Soluna Holdings (Nasdaq: SLNH) and Applied Digital Corporation (Nasdaq: APLD) have signed a definitive agreement to form a jointly owned company to develop a 50 MW data center for artificial intelligence and high-performance computing near Silverton, Briscoe County, Texas.

Under the agreement, Soluna will contribute land and power-related assets from its Dorothy 3 development site, which is co-located with the 150 MW Briscoe Wind Farm. Applied Digital will provide capital for the project's development. Applied Digital is expected to hold a 51% interest in the joint venture, with Soluna retaining the remaining 49%.

Phase 1 of the project, designated as Dorothy 3, is planned to draw power from both the Briscoe Wind Farm and the grid. The facility is located near Soluna's existing Dorothy 1 and Dorothy 2 projects.

ChronoScale Holdings Corporation (Nasdaq: CHRN), a publicly traded company majority-owned by Applied Digital, has signed a non-binding letter of intent to lease the planned facility under a triple-net lease arrangement. The company cautioned that no definitive lease agreement has been executed and there is no assurance one will be finalized.

The closing of the transaction is subject to several conditions, including approval of a tax abatement in Briscoe County, receipt of title policies, corporate approvals from both companies, and execution of definitive operating, lease, and power agreements. The transaction is expected to close by the end of the calendar year.

"We have said for a long time that the constraint in AI is energy access, not chips," said John Belizaire, CEO of Soluna. "Partnering with Applied at Dorothy 3 puts that strategy to work: our site and wind power, combined with a proven builder and operator of AI data centers."