Riot's $28B Lease Shows Why Location and Contracts Matter in AI

Key Points

• Riot Platforms signed a $28 billion data center lease, giving it long-term contracted revenue even as Texas faces uncertainty over future development approvals.
• IREN has major Texas facilities and substantial customer contracts, but parts of its Sweetwater expansion remain subject to grid approvals and future customer demand.
• Nebius and Applied Digital have less direct Texas exposure, although both face construction, financing, and execution risks.

Riot Platforms NASDAQ: RIOT gave investors two reasons to get bullish on Wednesday, Nov. 4. The company delivered its third-quarter earnings report. It also announced the largest lease in its history. The 15-year deal covers 910 megawatts (MW) of planned AI computing capacity at its Corsicana, Texas, campus. Riot values it at about $28 billion over the initial term.

Investors responded. Riot shares closed nearly 10% higher.

The same day, AI cloud stocks with big Texas footprints moved the other way. IREN NASDAQ: IREN and CoreWeave NASDAQ: CRWV both fell sharply. The Nov. 3 Texas election results raised new questions about future data center approvals in the state. That matters because Wells Fargo estimates that Texas accounts for 27% of planned U.S. data center power capacity.

The split points to a question that investors are starting to ask of every AI infrastructure stock. Where is the capacity located, and how much of it is already spoken for? Signed leases on sites with power in hand look very different from capacity still being marketed or still waiting on approvals.

Riot's largely leased Texas capacity contrasts with IREN's additional capacity still seeking customers, while Nebius Group NASDAQ: NBIS and Applied Digital NASDAQ: APLD have concentrated their U.S. developments outside the state.

Riot: $38 Billion in Leases, With Construction Still Ahead

Riot's data center business sits entirely in Texas, at its Rockdale and Corsicana campuses. That sounds like maximum exposure. But Riot already has established power infrastructure at both sites and has signed substantial long-term leases, although much of the planned AI capacity still needs to be delivered.

Across three agreements, Riot has 1,151 MW under contract. That represents about $38 billion of contracted revenue. The Corsicana deal is a triple-net powered land lease. The tenant, identified as Anthropic in Riot's SEC filing, pays rent on each delivered portion of the 910 MW whether it uses the capacity or not.

The catch is timing. Corsicana's first 400 MW phase is due in September 2027. The next 200 MW follows in January 2028, and the final 310 MW in July 2028. Rockdale's first AI lab phase is due in December 2027. Until then, Bitcoin mining still drives most of Riot's revenue.

IREN: Texas Hubs With Capacity Still to Sell

IREN's largest sites are also in Texas. Its Childress campus has 750 MW of capacity. Its Sweetwater hub is designed for up to 2 gigawatts (GW). IREN also operates in British Columbia and is developing sites in Oklahoma, Australia, and Spain.

Childress is where IREN's biggest contracts live, including a five-year, $9.7 billion deal with Microsoft. IREN says its 2026 capacity is largely sold out. The first 300 MW of gross data center capacity at Sweetwater 1 is targeted for the fourth quarter of 2027, with additional expansion expected from 2028. IREN was still in talks with customers over much of its 2027 capacity as of August.

That uncontracted capacity is the most exposed to any change in Texas permitting or grid rules. IREN's own filings already flag changes to the Texas grid operator's large-load interconnection process as a risk.

Nebius: Building Its AI Footprint Beyond Texas

Nebius has taken a different path. Its U.S. footprint runs through New Jersey, Missouri and Pennsylvania, and Alabama, with additional sites in Europe and elsewhere. A 1.2 GW Pennsylvania campus is expected to deliver its first 260 MW by October 2027.

Nebius reported more than $40 billion of committed backlog with its second-quarter results. It also had more than 3.5 GW of contracted power as of May. Investors should note the difference. "Contracted power" means secured electricity, not signed customers.

Nebius still fell alongside the group on Nov. 4, even though its direct Texas exposure appears limited. That suggests at least part of the selling was about the sector, not specific sites.

Applied Digital: Long-Term Leases Across Multiple States

Applied Digital also sits outside Texas. Its campuses are in North Dakota, Louisiana, and Alabama.

As of Aug. 31, it had leases for about 1.41 GW across five campuses, worth about $36 billion over their base terms.

About 250 MW is already operational at its Polaris Forge 1 campus in North Dakota. Other campuses come online in phases through 2028.

Applied Digital's tenants include CoreWeave and investment-grade hyperscalers.

Like Riot, it's a landlord with most of its pipeline already leased.

Why Existing Power and Signed Leases Matter

Location helps when the power is already in place, and the leases are already signed. Some analysts expect projects already underway to continue even if rules tighten. If new approvals slow, existing powered sites could become scarcer, and more valuable.

Riot has some of those advantages. Its Texas sites have established power infrastructure, and take-or-pay lease terms shift utilization risk to the tenant once capacity is delivered. However, construction and financing requirements remain.

Where Unleased Capacity Creates More Risk

Location hurts when revenue depends on capacity that isn't contracted or approved yet. New permitting steps, interconnection changes, or lost tax incentives could all stretch timelines. Any delay pushes back the date when rent or cloud revenue begins.

For Riot, the risk is executing on a schedule that runs into mid-2028. For IREN, it's the Texas capacity still waiting for customers. Nebius and Applied Digital carry less direct Texas risk, but neither is immune to tighter rules elsewhere.

The bottom line: in AI infrastructure, the map now matters as much as the backlog. Investors should ask two questions of every name. Where is the power? And is it already under contract?