Blockfusion Touts Up to $5.4B From AI Lease as SPAC Deal Advances

BlockFusion USA said it has signed a non-binding letter of intent (LOI) with an unnamed AI customer for up to 300 megawatts of critical IT capacity at its Niagara Falls, New York, campus, a deal that would anchor the company’s planned merger with Blue Acquisition Corp.

The proposed lease includes an initial 85 megawatts of guaranteed take-or-pay capacity over a 15-year term, with two five-year renewal options. BlockFusion estimates the initial 85-megawatt phase could generate about $2.8 billion of aggregate lease revenue over the 15-year term, or as much as $5.4 billion if the renewal options are exercised, according to SEC-filed investor materials. The company cautioned that the LOI remains subject to due diligence, final lease documentation, financing and construction requirements.

The announcement adds BlockFusion to a growing group of digital infrastructure companies trying to convert existing power positions and bitcoin mining sites into AI and high-performance computing campuses. Its Niagara Falls facility, now being marketed as a clean-power AI infrastructure platform, previously operated as a bitcoin mining and mining-colocation site.

The Niagara Falls site later became part of the city’s broader scrutiny of high-energy crypto facilities. In October 2022, Bit Digital (NASDAQ: BTBT), a then-bitcoin mining colocation customer, disclosed that BlockFusion’s facility had received a cease-and-desist notice from the City of Niagara Falls ordering a halt to cryptocurrency mining or related operations until the site complied with the city’s zoning ordinance and other local codes.

The enforcement action followed local pushback over cryptocurrency mining facilities in Niagara Falls, including concerns over noise from 24-hour operations. Some of the most visible complaints in local coverage focused on other mining sites in the city, while BlockFusion’s executives previously argued their facility was located in an industrial area and not the source of the loudest residential complaints. Still, the history underscores that BlockFusion’s AI plan is not a greenfield development but a proposed redevelopment and expansion of an existing high-energy-use site.

More recently, BlockFusion has sought to bring the site back into compliance and reposition it for a broader data center strategy. Local reports in 2025 said the company won approvals tied to reopening the Frontier Avenue bitcoin mine, while subsequent industry coverage described BlockFusion as pivoting from bitcoin mining toward HPC and AI data centers.

BlockFusion currently operates a 50-megawatt facility in Niagara Falls and is seeking to redevelop the site from a Tier 1 facility into a Tier 3 architecture capable of supporting ultra-high-density GPU clusters, including liquid cooling and racks of as much as 200 kilowatts, according to SEC-filed investor call materials.

The company said it has entered into an exclusivity agreement to acquire adjacent parcels that would expand the Niagara campus from about 5 acres to roughly 40 acres. Management said the larger site could support a development pathway of more than 300 megawatts of critical IT load over time, though the plan depends on land acquisition, financing, construction and definitive customer agreements.

BlockFusion said the site benefits from access to clean, renewable power at an all-in cost of about 6 cents per kilowatt-hour. Management said the location in NYISO Zone A West gives the company access to one of the more reliable and cost-efficient power zones in the country.

For the 85-megawatt phase, BlockFusion expects the first 25 megawatts to be delivered during 2027, with 2029 representing the first full year in which the entire 85 megawatts are deployed and billed. Management forecasts about $150 million of net revenue and about $100 million of EBITDA in 2029, implying a roughly 65% EBITDA margin. The company estimates the 85-megawatt project would require about $900 million of capital expenditure, or about $10.5 million per megawatt of critical IT load.

BlockFusion and Blue also disclosed non-binding financing term sheets with Sona Asset Management, including a proposed $175 million private placement of convertible notes and a non-redemption agreement covering about $33 million of Blue trust-account funds. The financing is expected to support the initial build-out and capitalization of the combined company, but remains subject to definitive documentation and other closing conditions.