Soluna Holdings, Inc. (Nasdaq: SLNH), the Albany, N.Y.-based developer of green data centers for intensive computing including artificial intelligence, announced on October 21, 2026 that it has entered into a definitive agreement with Applied Digital Corporation (NASDAQ: APLD) to form a jointly owned company to develop a planned 50 MW critical IT data center for AI and HPC.

A Site Built Around Generation

The project, known as Project Dorothy 3, will rise on Soluna's development site near Silverton in Briscoe County, Texas, adjacent to the Briscoe Wind Farm. The announcement came with a pointed statement from Soluna's chief executive about why the company sites its facilities the way it does.

"We have said for a long time that the constraint in AI is energy access, not chips," said John Belizaire, CEO of Soluna. "We built Soluna to bring load to the generation, so the power would be ready when the demand arrived.

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."

Belizaire also noted that Soluna looks forward to completing the remaining steps, including the tax abatement process in Briscoe County, and to bringing the project forward with the local community.

How the Joint Venture Is Structured

Under the Transaction Agreement, the two companies will each bring distinct contributions to the jointly owned Project Company. Soluna is expected to contribute a portion of the Dorothy 3 site, including land and power-related project assets, while Applied Digital is expected to provide capital to support the development of the Project. Ownership will tilt toward the capital provider.

Following the closing of the transactions, Applied Digital is expected to hold a 51% interest in the Project Company, with Soluna retaining the remaining 49%.

The path to closing is not automatic. The transaction is subject to a number of conditions precedent, among them approval of a tax abatement for the Project in Briscoe County, receipt of title policies, and obtaining certain corporate approvals.

The parties must also successfully negotiate and execute the operating agreement for the Project Company, definitive leases, power agreements, and other definitive agreements, along with other customary conditions. If those conditions are satisfied, the transactions are expected to close by the end of the calendar year.

Wind and Grid Power for Phase 1

Dorothy 3 is designed as an AI data center co-located with Briscoe Wind, a 150 MW wind farm in Briscoe County near Soluna's existing Dorothy 1 and Dorothy 2 projects.

Subject to definitive documentation, Phase 1 of Dorothy 3, comprising 50 MW of critical IT capacity, is expected to draw power from both Briscoe Wind and the grid.

That co-location model sits at the center of Soluna's pitch. The company develops green data centers for intensive computing applications, including artificial intelligence, and has positioned its Texas sites to pair computing load directly with nearby renewable generation.

The partnership with Applied Digital, which describes itself as a proven builder and operator of AI data centers, pairs that siting strategy with an operator experienced in the AI and HPC market.

ChronoScale Signs Letter of Intent to Lease

Alongside the joint venture announcement, Soluna and Applied Digital disclosed a separate development concerning the future tenant of the planned facility. ChronoScale Holdings Corporation (Nasdaq: CHRN), an accelerated compute platform purpose-built to support demanding AI workloads, has signed a non-binding letter of intent to lease the planned facility.

ChronoScale is a publicly traded company majority-owned by Applied Digital, tying the prospective tenant directly to one of the two joint venture partners.

The lease remains subject to the negotiation and execution of definitive documentation, and the announcement cautioned that 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.

What Comes Next

With the definitive agreement signed, the immediate work for both parties centers on the closing conditions: securing the Briscoe County tax abatement, obtaining title policies and corporate approvals, and finalizing the operating agreement, leases, and power agreements that will govern the Project Company.

The companies expect the transactions to close by the end of the calendar year.

If the ChronoScale letter of intent matures into a definitive lease, the planned 50 MW facility would enter development with an anchor tenant already identified, though the announcement made clear that no such assurance exists at this stage.