Zone Frontier Signs 30-Year Lease for 4,077-Acre AI Data Center Site in Texas, US

Zone Frontier Inc. (NYSE American: ZONE) said on Sept. 29, 2026, that a subsidiary has executed a long-term ground lease for approximately 4,077 acres in Potter County, Texas, securing the land, water, and development rights for its previously announced West Texas AI data center campus.

Project Development and Land Lease Overview

The project is being developed in partnership with HST Technologies, Inc., the AI infrastructure platform provider behind Cue.

The lease places the Houston-based company in control of a large contiguous parcel surrounding the existing Potter County 345 kV substation operated by Southwestern Public Service Company, an Xcel Energy company located in the Southwest Power Pool region.

Zone Frontier said it believes the site offers a potential path to grid interconnection alongside dedicated on-site generation.

Under the deal, Zone may designate between 200 and 800 acres for data center facilities and related infrastructure, with at least 1,800 acres reserved for solar generation, battery storage and supporting infrastructure.

CEO Tyler Hassen Points to Optionality in the Deal Structure

Chief Executive Officer Tyler Hassen said the agreement bundles the essential elements of AI infrastructure development into one instrument.

"This agreement gives Zone what matters most in AI infrastructure: land at scale, a faster path to power, and water, all secured under one long-term agreement with tremendous option value," Hassen said. "The attractive lease structure allows us to advance tenant acquisition, power and permitting work in a disciplined sequence, without committing any significant capital before the key pieces are in place."

Hassen also expressed appreciation for working with the landowner and the local community, saying Zone looks forward to building a flagship campus in the Texas Panhandle and will continue to invest in the local tax base, hiring and the community.

Rent Starts Only When Construction Begins

The lease runs for an initial term of 30 years with two 10-year extension options. Base rent for each site area begins only when construction starts on that area, an arrangement the company said aligns land costs with development milestones.

Zone also holds an option to purchase the data center site, subject to certain conditions. The lease includes a long-term water supply agreement, co-terminous with the lease, drawing on water rights appurtenant to the property.

Siting Benefits Cited Beyond the Substation

In addition to substation adjacency, the company pointed to proximity to two major natural gas pipelines and said it believes the property is well suited for a large-scale solar and battery plant that could add significant power capacity to the region.

Zone also said it believes the site has favorable access to fiber services.

The campus is sized to an initial 200 megawatts, with potential to expand beyond 500 megawatts, and forms part of Zone's active and growing pipeline of AI infrastructure projects aimed at rapidly increasing demand for compute power.

Work Begins on Tenants, Permitting, and Financing

With the land secured, Hassen said the immediate focus shifts to securing tenants, advancing permitting, and completing power and interconnection studies.

As tenant discussions progress, Zone will concurrently evaluate financing options with co-investment equity partners and project finance lenders, he said, adding that the company is focused on ensuring the project delivers lasting benefits for the local community.

Zone said it continues to actively evaluate additional development opportunities across rural and industrial areas of the United States.

Minnesota Project Advances Alongside the Texas Deal

The Potter County lease comes as Zone Frontier pushes forward on a separate campus in Minnesota, anchored by an initial 10-year Colocation Services Agreement with Cerebras Systems, Inc. (NASDAQ: CBRS), with two 10-year potential extension options.

The company said the Minnesota campus is making material construction progress and expects to generate revenue beginning in the first half of 2027, consistent with previous guidance.

Project finance discussions for that campus are also progressing concurrently, according to the company.

About the Company and Forward-Looking Statements

Zone Frontier Inc. describes itself as helping to build the critical infrastructure that powers the AI economy, with a growing pipeline of projects intended to meet rising demand for compute capacity, power and digital infrastructure from the world's leading AI companies.

The company noted that the announcement contains forward-looking statements under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, covering the development, scale, power supply, water supply and timing of the Texas campus, any exercise of purchase or extension options, the company's business strategy and project pipeline, and its expected transition to an AI infrastructure business.

Zone cautioned that these statements rest on management's current expectations and assumptions and are subject to significant risks and uncertainties that could cause actual results to differ materially, including the company's ability to secure tenants for the Texas campus and obtain sufficient power and grid interconnection, with additional risk factors continuing beyond the excerpt provided in the announcement.