Hut 8 has secured a second 15-year lease worth $9.8 billion at its Beacon Point AI data center campus in Nueces County, Texas. This move brings the total contract value for the campus to $19.6 billion, marking a significant expansion in the AI infrastructure landscape.
What Happened
Hut 8's latest lease agreement adds 352 megawatts of information technology capacity to the Beacon Point campus, doubling the contracted IT capacity to 704 megawatts. The agreement, structured as a triple-net lease, mirrors the terms of the first phase, with the tenant assuming property-related expenses. Notably, this expansion is part of Hut 8's strategy to leverage NVIDIA’s DSX reference architecture for gigawatt-scale AI infrastructure. This architecture will support a second 352-megawatt AI factory with 500 megawatts of utility capacity. The lease includes a 3% annual increase in base rent over the initial 15-year term.
Hut 8 anticipates cumulative net operating income of $9.8 billion from this agreement, averaging $655 million annually once stabilized operations commence. The first data hall of the second phase is expected to be delivered in the second quarter of 2028, with site preparation already underway.
What This Means for Your Business
For AECM professionals, Hut 8's expansion showcases a robust model for securing and commercializing large-scale AI data center projects. The company's power-first strategy—securing energy capacity prior to matching sites with computing customers—could serve as a blueprint for similar projects. This approach ensures flexibility and positions Hut 8 advantageously in the energy-intensive computing market.
The $19.6 billion contract value at Beacon Point, combined with the company's broader AI data center portfolio valued at $26.6 billion, underscores the lucrative opportunities within the AI infrastructure sector. AECM stakeholders should consider the implications of such large-scale projects on procurement strategies, especially in terms of securing utility capacities and managing long-term leases.
What US Operators Should Watch
Operators should track the delivery timeline for the second phase of Beacon Point, with initial energization scheduled for the first quarter of 2027 and data hall delivery in mid-2028. Additionally, the triple-net lease structure and its financial implications are essential considerations for future contracts. The potential for three five-year renewals could extend the campus's contract value to $50.2 billion, highlighting the long-term investment opportunities in AI data centers.
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