BlockchAIn Digital Infrastructure Says Nebius Prepayment Funds $800M Data Center Build

Key Points

• BlockchAIn Digital Infrastructure plans to develop a 50-megawatt data center for Nebius with an estimated $800 million budget and a 12-year firm contract. Customer prepayments are expected to exceed the company’s roughly $100 million equity requirement, potentially eliminating the need for an equity raise.
• The project is expected to use about $560 million of construction debt and $140 million of project-level preferred equity. The first 25 MW hall is targeted for completion about 10 months after escrow funding, with operations and cash flow expected to begin around the fourth quarter of 2027.
• AIB forecasts approximately 90% EBITDA margins, with utility costs passed through to Nebius. Management also cites an additional pipeline of about 280 MW across four sites and aims to build a portfolio of eight to 10 clients over the next 24 months.

BlockchAIn Digital Infrastructure NYSEAMERICAN: AIB outlined its plans to develop a 50-megawatt data center project under a newly executed contract with Nebius, with management saying customer prepayments are expected to cover the company’s required equity contribution to the project.

During a corporate update call, Chief Executive Officer Jerry Tang said the agreement covers 50 MW of IT load for an initial 12-year term. Tang described the agreement as a firm contract without termination options, adding that any termination provisions would require full payment.

“We are receiving a material amount of prepayment from the client, and we can use that for POs and other construction costs right away,” Tang said, referring to purchase orders. “Based on that, we do not need to raise any equity.”

Project funding and construction timeline

AIB estimated a total development budget of about $800 million for the project. Management’s anticipated capital structure includes approximately $560 million of construction debt, $140 million of project-level preferred equity and roughly $100 million of equity. Tang said the customer prepayment exceeds the estimated $100 million equity requirement.

Chief Financial Officer Jolienne Halisky said the company has been working with Bank Street on financing preparations for several months. She said the company projects debt funding equal to 70% of the $800 million project budget and is beginning discussions regarding the preferred-equity portion.

Halisky said the preferred investment would be at the project company or special-purpose-vehicle level. Tang said management expects the preferred equity to carry an accrual rate in the low teens and an equity kicker of 10% to 20% at the project level, while stating that the company does not intend to permit conversion into AIB common stock.

Tang said escrowed customer funds can be drawn for purchase orders and construction costs. He characterized the prepayments as advance rent. Halisky added that a portion treated as a rental prepayment or security deposit would be accounted for as deferred rent, while non-recurring fit-out charges would be recorded as property, plant and equipment.

The company expects the first 25 MW data hall to be completed approximately 10 months after it receives escrow funds, followed by the second 25 MW hall in about 14 months. Halisky said AIB expects operational cash flow from the site to begin when the first hall comes online, which she placed around the fourth quarter of 2027.

Pricing, power and margins

While AIB did not disclose the total contract value because of customer confidentiality, Tang said the company’s rate exceeds the range shown for three comparable contracts, which ranged from $1.87 million to $2.16 million per MW per year of IT load. He said investors could use those figures to estimate the contract’s potential value, but the company could not provide the specific amount.

Tang said AIB will remain the counterparty to the electric service agreement with the utility, while utility costs will be passed through to Nebius. He also said he expects EBITDA margins of about 90%.

Addressing project costs, Tang said the $800 million budget equates to roughly $12 million per MW based on 65 MW of utility load. He said the company has observed turnkey construction costs ranging from $10 million to $14 million per MW of utility load.

Pipeline and site strategy

Tang said the Nebius agreement follows AIB’s May utility contract for 65 MW over a 15-year term. The company is decommissioning an existing Bitcoin mining facility at the project site as construction preparations begin.

AIB also controls four additional sites, according to Tang. He said the company owns the DFW1 site and has executed an electric service agreement there. Together, the additional sites represent approximately 280 MW of potential capacity that could be contracted and developed over the next three to six months, he said.

Management said it is focused on data centers below 100 MW, aiming to avoid lengthy approval processes and potential community opposition associated with larger projects. Tang said the company prefers markets with clear data center regulations, including jurisdictions where capacity thresholds help define what can be developed.

“Every data center, we lease to one client,” Tang said. The company’s longer-term objective is to build a diversified portfolio of eight to 10 clients over the next 24 months, he added.

Tang said AIB is in active discussions with multiple potential customers for two other sites and that each has at least five or six prospective clients reviewing it. He also said the master service agreement with Nebius could allow future sites to be added through purchase orders rather than requiring a complete renegotiation of the agreement.

About BlockchAIn Digital Infrastructure (NYSEAMERICAN:AIB)

BlockchAIn Digital Infrastructure Inc is engaged in the digital infrastructure business, providing data center operations and high-performance computing services. The company offers power infrastructure, hosting services, and equipment leasing to customers involved in blockchain computing, artificial intelligence, and high-performance data processing. Its operations include leasing space, power capacity, and equipment within data center facilities, as well as offering modular digital asset mining containers and related hardware and support services.

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