Rockdale and Corsicana cost risks and contractor guarantees
Q: Mike Grondahl with Northland Securities asked what gives management confidence in the $11 million to $12 million per megawatt CapEx estimate for Rockdale, how much is fixed, and who bears the risk if costs exceed estimates.
A: Jason Les answered that confidence comes from thorough pre-signing design and pricing work. Approximately 70% of the total budget at Rockdale is expected to be under guaranteed maximum price contracts, while owner-furnished and contractor-installed equipment is being procured directly. Tenant change orders are paid by the tenant, and cost overruns past the guaranteed maximum price are the contractor's responsibility.
Corsicana deal structure and single-tenant decision
Q: Stephen Byrd with Morgan Stanley asked about the thought process behind choosing a single tenant for the entire Corsicana site and how the process evolved.
A: Jason Les explained that a single tenant takedown was the clear outcome because subdividing would introduce operating complexity and reduce leasable space, and potential tenants expressed interest in the entire site. Discussions evolved from a 756-megawatt LOI into a 910-megawatt agreement that provided attractive economics while meeting the tenant's accelerated time-to-compute objectives.
Q: Stephen Byrd with Morgan Stanley asked what drove the decision to use the triple-net powered land lease structure at Corsicana and how it compares to the market.
A: Jason Les stated that the triple-net structure maximizes shareholder value on a risk-adjusted basis by offering high rental rates while cutting required CapEx in half compared to a Tier 3 build. This structure significantly limits procurement, construction, and financing risks while delivering faster revenue generation, with the first phase starting in September 2027.
Rockdale remaining capacity and AMD options
Q: Paul Golding with Macquarie Group asked about AMD's expansion options and remaining leasable capacity at Rockdale, and whether future leasing would follow the Corsicana structure.
A: Jason Les noted that AMD holds an option for an additional 150 megawatts, leaving about 200 to 250 critical IT megawatts of remaining leasable capacity at Rockdale. Management expects the remainder to be taken down by existing tenants or strong interested parties, with development following existing product types rather than the Corsicana structure.
Q: Paul Golding with Macquarie Group asked how the Bitcoin mining capacity currently running at Corsicana relates to the Phase 1 delivery timeline and when decommissioning might occur.
A: Jason Les stated that Bitcoin mining will not need to be taken down for the first 400-megawatt phase, but will ramp down as the second phase is prepared, likely beginning in the summer of 2027.
Political environment and site approvals
Q: Richard Choe with JPMorgan asked if there are any risks to the Rockdale or Corsicana campuses resulting from the recent political election results.
A: Jason Les responded that both sites have power interconnections that are fully approved and have been operating for years, requiring no additional approvals for development. Furthermore, strong multi-year relationships with local communities provide a stable operational foundation.
Q: Richard Choe with JPMorgan asked whether operating presence at Corsicana provided an advantage in signing the deal with the AI lab.
A: Jason Les confirmed that existing operations and proof of power interconnect, including the substation on site and substation expansion underway, made the site extremely valuable and enabled the deal to be completed on favorable terms.
