← Back to feed

Two long-term leases at Hut 8’s Beacon Point campus in Nueces County, Texas, total USD 19.6 billion in combined base-term value, rising to 50.2 billion if all renewal options are exercised. The Financial Times, citing five people familiar with the transactions, identified Nvidia as the tenant behind both Phase 1 and Phase 2 of Beacon Point. Nvidia has not publicly confirmed it is the party to either lease, stating only that it works with ecosystem partners to accelerate AI infrastructure deployment through its DSX AI factory architecture.

Two phases, one campus

Phase 1, disclosed in May 2026, covers 352 megawatts and is valued at USD 9.8 billion over its base term. Phase 2, announced subsequently, adds a second lease of equivalent base-term value. Together, the leases give the campus secured interconnection for one gigawatt of electricity capacity under an AEP Texas agreement.

One gigawatt is sufficient to support a dense concentration of high-performance compute, cooling infrastructure, and high-speed networking. Power at this scale is a binding constraint in AI infrastructure expansion and represents a strategically valuable asset regardless of who ultimately operates it.

Financial structure

Hut 8 raised approximately USD 4.25 billion in investment-grade bond financing rated Baa2 by Moody’s to fund Phase 1 construction. The presence of a high-credit tenant — confirmed as investment-grade by Hut 8 even without publicly naming the party — was central to securing those ratings and lowering borrowing costs.

The structure illustrates the financing logic behind large-scale AI campus development: a data centre developer needs capital to build; a chipmaker needs powered, purpose-built facilities to host its hardware; cloud operators need capacity. A long-term lease with an investment-grade counterparty can underwrite all three in a single transaction.

The circular financing question

The arrangement has revived scrutiny over supplier-backed infrastructure financing. If Nvidia is underwriting Beacon Point construction and the campus then hosts Nvidia hardware sold to cloud subtenants, the revenue chain is real — but its sustainability depends on whether end-user demand is sufficient to justify the structure without continued supplier support.

Nvidia’s stated position is that DSX solves an infrastructure bottleneck: packaging chips, cooling, networking, and software integration into a deployable unit. The counterargument is that a chipmaker funding capacity that buys its chips risks inflating demand signals rather than merely unlocking latent infrastructure supply. At USD 19.6 billion committed and a 15-year base term on the combined leases, that question will run for at least a decade.