Soluna Formalizes Metrobloks JV for 350 MW Texas AI Data Center Campus

Soluna (NASDAQ: SLNH) Holdings has formalized a joint venture with Metrobloks for Project Kati 2, a planned multi-phase data center development in Willacy County, Texas, adding structure to the company’s push beyond bitcoin mining and hosting into AI and high-performance computing infrastructure.

The agreement, disclosed in an SEC filing Tuesday, governs the operation of Soluna MB KK II JVCo, LLC, a joint venture between Soluna HPC KK II HoldCo, LLC and DC Kati Venture LLC, an entity managed by Metrobloks LLC. Soluna’s subsidiary holds all Class A interests in the venture, while the Metrobloks entity holds all Class B interests. Soluna will serve as manager of the manager-managed LLC.

Project Kati 2 is expected to be developed in two phases. The first phase is planned as a 100 MW critical IT data center development, while the second phase would add another 250 MW of critical IT capacity, bringing the total contemplated buildout to 350 MW.

The filing provides more detail on the economics of the partnership. Soluna contributed the Phase I property, a purchase agreement to acquire the Phase II property and about $3.5 million to fund certain operating expenses. Subject to closing of the Phase II property acquisition, Soluna has committed to contribute about $19 million to complete that purchase, plus up to another $2 million for operating expenses as they come due.

Under the distribution waterfall, Soluna is entitled to repayment of its capital contributions, a 14% internal rate of return on those contributions and $100,000 per gross PPA MW of Project Kati 2 before Soluna and Metrobloks split additional distributions equally.

The structure gives Soluna a preferred return and development-cost recovery before the project shifts to a 50-50 sharing arrangement, while allowing Metrobloks to participate in the upside of a larger AI-focused campus. For Soluna, the agreement is also a step toward converting its renewable-energy and land-positioning strategy into a more conventional data-center development model, where project-level partnerships, tenant commitments and external capital are likely to determine how quickly the pipeline can scale.

Soluna and Metrobloks had previously announced plans to work together on Kati 2, describing the project as an AI and HPC campus at Soluna’s broader Kati site in South Texas. Earlier company materials described Kati 2 as a planned 100 MW-plus AI/HPC development with a path to more than 300 MW of critical IT capacity. Soluna’s first-quarter filing said the project was being advanced with Metrobloks, with design work set to begin in May after the final stages of the design RFP were completed in April.

The Kati campus is part of Soluna’s broader strategy to use renewable power sites for compute infrastructure. Soluna has historically operated across bitcoin mining, hosting and demand-response businesses, but has increasingly emphasized AI-ready data center development as miners and power-backed infrastructure companies seek to capture demand from hyperscalers, neoclouds and other compute buyers.

The Kati 2 agreement comes as access to large blocks of power has become one of the most important bottlenecks in the AI infrastructure buildout. For smaller developers such as Soluna, securing land, power arrangements and a credible development partner is only one stage of the process. The larger test will be whether the project can secure customers and financing on terms that support full-scale construction.

The filing did not announce a tenant, construction start date or financing package for Kati 2.