Houston-based Zone Frontier Inc. (NYSE American: ZONE) has taken a major step in developing its West Texas AI data center campus, announcing on Sept. 29, 2026, that a subsidiary entered into a long-term ground lease covering approximately 4,077 acres in Potter County, Texas.

The agreement secures land, water, and development rights for the project, which the company is building in partnership with HST Technologies, Inc., the AI infrastructure platform provider behind Cue®.

Under the lease, Zone may designate between 200 and 800 acres for data center facilities and related infrastructure, and at least 1,800 acres for solar generation, battery storage and supporting infrastructure.

The company said the initial 200-megawatt campus could expand beyond 500 megawatts, and that it forms part of an active and growing pipeline of AI infrastructure projects intended to support rapidly increasing demand for compute power.

Grid interconnection at the heart of the site selection

A central feature of the property is its position surrounding Southwestern Public Service Company's existing Potter County 345 kV substation in the Southwest Power Pool region.

Southwestern Public Service Company is an Xcel Energy company, and Zone believes the location offers the campus a potential path to grid interconnection alongside dedicated on-site generation.

The site also sits in close proximity to two major natural gas pipelines, and the company believes it is well suited for a large-scale solar and battery plant that could add significant power capacity to the region.

Zone additionally believes the site has favorable access to fiber services.

Terms structured around development milestones

The lease carries an initial term of 30 years with two 10-year extension options. Base rent for each site area begins only upon the start of construction on that area, an arrangement the company said aligns land costs with development milestones.

The agreement also grants Zone an option to purchase the data center site, subject to the satisfaction of certain conditions.

Alongside the lease, the company secured a long-term water supply agreement co-terminous with the lease term, drawing on the water rights appurtenant to the property.

Leadership frames the deal as land, power and water in one package

"This agreement gives Zone what matters most in AI infrastructure: land at scale, a faster path to power, and water, all secured under one long-term agreement with tremendous option value," said Tyler Hassen, Chief Executive Officer of Zone Frontier.

"The attractive lease structure allows us to advance tenant acquisition, power and permitting work in a disciplined sequence, without committing any significant capital before the key pieces are in place."

Hassen added that the company appreciates working with the landowner and local community and looks forward to building a flagship campus in the Texas Panhandle.

"With this campus, we'll continue to invest in the local tax base, hiring, and the community more broadly," he said. "We are now focused on securing tenants, advancing permitting, and completing power and interconnection studies for the site," Hassen continued.

"As tenant discussions progress, we will concurrently evaluate financing options with both co-investment equity partners and project finance lenders.

We are also focused on ensuring this project delivers lasting benefits for the local community."

Minnesota campus progresses on parallel track

The Texas Panhandle project is not Zone's only active development. The company's portfolio also includes a Minnesota data center campus operating under an initial 10-year Colocation Services Agreement with Cerebras Systems, Inc. (NASDAQ: CBRS), with two 10-year potential extension options.

Zone said that campus is making material construction progress and that it expects to generate revenue beginning in the first half of 2027, consistent with previous guidance. Project finance discussions for the Minnesota campus are also progressing concurrently, consistent with prior guidance.

The company said it continues to actively evaluate additional development opportunities across rural and industrial areas of the United States.

Company background and forward-looking risks

Zone Frontier Inc. describes itself as helping to build the critical infrastructure that powers the AI economy.

Through a growing pipeline of projects, the company aims to help meet the increasing demand for compute capacity, power and digital infrastructure required by the world's leading AI companies.

The announcement was made in a press release and distributed through the company's investor relations newsroom.

The release notes that forward-looking statements are subject to significant risks and uncertainties, including the company's ability to secure tenants for its Texas data center campus and to obtain sufficient power and grid interconnection.