Hut 8 Corp. (HUT) saw its shares leap more than 32% in early trading Wednesday following the announcement of a landmark 15-year lease valued at $9.8 billion for its Beacon Point data center campus in Nueces County, Texas. The agreement marks a significant step in the bitcoin miner's strategic shift toward artificial intelligence infrastructure, positioning the company to capitalize on the surging demand for computing power.
Massive Capacity Expansion
The initial phase of the lease covers 352 megawatts of IT capacity dedicated to servers and related equipment. With this deal, Hut 8's total contracted AI data center capacity now stands at 597 megawatts, while the aggregate base-term contract value has risen to approximately $16.8 billion. This move anchors a larger portion of Hut 8's future revenue to long-term, large-scale compute contracts, reducing its reliance on bitcoin-mining income.
Beacon Point is planned as a 1-gigawatt campus, and Hut 8 has already secured an interconnection agreement covering 1,000 MW of utility capacity. Initial energization is expected in the first quarter of 2027, with the first data hall slated for delivery in the third quarter of that year. As a result, the project remains in the development phase, with full revenue realization still some time away.
Key Counterparty and Lease Terms
Hut 8 has not disclosed the tenant's identity, describing it only as a high-investment-grade counterparty. CEO Asher Genoot told Reuters the lease carries a 15-year obligation with no termination for convenience. Under take-or-pay provisions, the customer must pay for the contracted capacity regardless of actual usage, and the triple-net structure shifts property-related costs to the tenant. The base rent includes annual 3% escalators, and the total potential value could reach roughly $25.1 billion if all three five-year renewal options are exercised. Hut 8 projects average net operating income of $655 million per year from Beacon Point once stabilized.
Infrastructure and Partners
The Texas facility will be built to Nvidia's DSX reference architecture, optimized for large-scale AI computing. Jacobs is leading engineering, procurement, and construction management, while Vertiv handles critical digital infrastructure. American Electric Power's AEP Texas subsidiary is providing the utility connection.
Market Reaction and Peer Performance
Hut 8's stock surged to $106.42, a 32.2% gain, outpacing other crypto and AI infrastructure plays. IREN added 6.6%, Cipher Digital rose 3.5%, and Core Scientific advanced 9.1% in morning trading.
First-Quarter Financial Results
Hut 8 also released first-quarter earnings alongside the lease announcement. Revenue jumped to $71.0 million from $21.8 million a year earlier, driven by compute revenue growth. However, net loss widened to $253.1 million from $134.3 million, largely due to $295.7 million in unrealized losses on digital assets. Adjusted EBITDA came in at negative $250.5 million, compared with negative $117.7 million in the prior-year period, reflecting the digital-asset losses.
On the balance sheet, Hut 8 reported roughly $1.3 billion in combined cash and bitcoin holdings as of March 31, comprising $795.6 million from Hut 8 and $489.0 million tied to American Bitcoin. The company also reduced the interest rate on its $200 million bitcoin-backed credit facility with FalconX from 9% to 7%.
Risks and Outlook
Despite the positive news, significant risks remain. The tenant is still unnamed, construction has yet to begin, and project financing is unresolved. The company's filing highlights potential hurdles including power availability, data-center construction delays, leasing changes, intense competition, customer demand fluctuations, cybersecurity threats, and bitcoin price volatility. Investors are betting on smooth execution well before the first building is delivered.
