Riot Platforms, Inc. (RIOT) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Riot Platforms Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Josh Kane, Head of Investor Relations. Sir, please go ahead.

Thank you, operator. Good afternoon, and welcome to Riot Platforms Second Quarter 2026 Earnings Conference Call. My name is Josh Kane, Head of Investor Relations. And joining me on today's call from Riot are Jason Les, Chief Executive Officer; and Jason Chung, Chief Financial Officer. On the Riot Investor Relations website, you can find our second quarter 2026 earnings press release and accompanying earnings presentation, which are intended to supplement today's prepared remarks and which include a discussion of certain non-GAAP items. Non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's second quarter 2026 performance. During today's call, we will make forward-looking statements regarding potential future events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Actual results could materially differ due to factors discussed in today's earnings press release, our comments and responses made during today's call, the Risk Factors section of our Form 10-K and Forms 10-Q, including for the 3 months ended June 30, 2026, which we expect to file later today, and our other filings with the Securities and Exchange Commission. With that, I will turn the call over to Jason Les, CEO of Riot Platforms.

Thank you, Josh, and good afternoon, everyone. The AI era has 2 binding constraints, power and execution. This quarter demonstrated Riot's answer to both. The second quarter of 2026 marked a decisive step forward in Riot's data center business and represents a clear validation of the assets, team, and strategy we have assembled. Following our first data center lease with AMD earlier this year, demand for large-scale power data center capacity has continued to accelerate, and we have taken a disciplined approach in response, the right transactions with the right partners on the right terms. I'm pleased to share our progress with you today. Four key accomplishments define this progress. First, at Rockdale, subsequent to quarter end, we executed a data center lease with one of the world's leading frontier AI labs for 191 megawatts of critical IT capacity. This is our second data center lease at Rockdale. Our lease with the AI lab has a 20-year term and is expected to generate approximately $9.1 billion in total contract revenue with two 5-year extension options that, if exercised, would bring total contracted value to approximately $16.1 billion. Together with the AMD lease, Riot has now secured approximately $9.8 billion of contracted data center revenue with 2 leading companies in the AI ecosystem. Second, at Corsicana, interest in our 1 gigawatt of fully approved utility power has been substantial. From a broad field of prospective tenants, we have narrowed our focus and entered into a nonbinding letter of intent with a single tenant for the entirety of the site, a transaction which we are engaged in advanced commercial and design discussions. A potential deal of this scale demands deep collaboration across design, commercial and legal work streams, and that work is well underway. In parallel, we continue to progress data center development at the site and critical path procurement of long lead time items to ensure delivery time lines and derisk execution. Third, we continue to deliver on time for AMD as part of our growing partnership. We commissioned and delivered the final phase of the first 25 megawatts of capacity in May to AMD on time and on budget, with AMD operating on the site since January. Following AMD's exercise of its expansion option in April, its contracted capacity now stands at 50 megawatts of critical IT capacity at our Rockdale site, with the 25-megawatt expansion under construction with first phase delivery later this year and full delivery scheduled for May 2027. And fourth, we secured the funding required for this growth. We continued the sale of Bitcoin from our balance sheet and our mining operations. These proceeds remain our primary source of funding for operations and the equity component of our data center capital expenditures. We ended the quarter with $1.2 billion in total liquidity, consisting of $666 million in Bitcoin and $549 million in cash, giving our partners, tenants, lenders and shareholders confidence in our ability to execute. If 2025 was the year of preparation, 2026 is the year of execution. In the last 7 months, Riot has gone from 0 contracted data center revenue to 241 megawatts of executed capacity with 2 of the highest quality counterparties in the AI ecosystem, AMD and now a leading frontier AI lab. Beyond that, the entire Corsicana campus is now under a nonbinding LOI to a single tenant. This pace of execution is a direct result of the strategy, the assets and the team we have spent the last 2 years putting in place. The lease we are announcing today is contracted directly with one of the world's leading frontier AI labs for 191 megawatts of critical IT capacity at our Rockdale campus and marks the beginning of what we expect to be a long and significant partnership. Under the lease, Riot is constructing a custom-built Tier 3 data center based on the tenant's latest design specifications, which has now been finalized. It will be built on land we announced the acquisition of earlier this year, which has already been cleared and graded using in-place power capacity under our active interconnection. Development work is already underway, and we are currently targeting delivery for the first 96 megawatts with rent commencing in December 2027. The 20-year initial term runs from full deployment in June 2028 with annual escalations in base rent. Beyond the initial term, the AI lab holds two 5-year extension options, which, if exercised, would bring total contract revenue to approximately $16.1 billion. Over the initial term, the lease is expected to generate approximately $9.1 billion in total contract revenue and an estimated $7.3 billion to $8.2 billion in net operating income based on an estimated NOI margin range of 80% to 90%. Illustrative capital expenditures are between $11 million and $12 million per IT megawatt. On financing, we have secured a $573 million interim financing facility from Morgan Stanley, which will cover initial development CapEx while the investment-grade backstop is finalized. Jason Chung will discuss what this means for our financing strategy later on today's call. Having a frontier partner of this caliber entrusting Riot with 191 megawatts of mission-critical infrastructure on a 20-year commitment is a definitive validation of our team, our sites, and our ability to execute at the highest level. This is precisely the type of durable, high-quality contracted cash flow, which we are building this platform to capture for our shareholders. Now let's turn to Slide 8 and our delivery schedule. Capacity under the AI lab lease will be delivered in 2 phases. Phase 1 delivers the first 96 megawatts of critical IT capacity in December 2027, a rapid time line from signing to initial delivery and Phase 2 delivers the remaining capacity in June 2028, completing the full 191-megawatt deployment. We are on schedule for that initial delivery and execution has been meaningfully derisked across several fronts. First, design. Our accelerated design strategy incorporates the tenant's basis of design and the complete design and internal architecture have now been finalized, enabling procurement to have already begun. Second, delivery partners. We have selected Yates Construction as our general contractor, a partner with direct development experience with this tenant, giving us increased visibility into cost and schedule. Third, vertical integration. ESS Metron and E4A are integrated into the delivery plan, accelerating substation development and reducing long lead equipment risk. Fourth, power. The required capacity is secured under our active interconnection and aligned with project milestones. And fifth, financing. The $573 million interim facility from Morgan Stanley allows us to fund long lead procurement immediately, protecting the delivery schedule while credit support is finalized. Taken together, the combination of in-place power, advanced procurement, coordinated design, our in-house capabilities and financing allows us to deliver at speed and with a high degree of certainty. That derisked rapid execution is precisely what attracted this tenant to Riot and to Rockdale. Now let me turn to AMD, where our deployment progress remains on track. During the quarter, we completed delivery of the initial 25 megawatts of capacity on budget and on schedule. AMD has now commenced operations across this initial footprint and Riot is generating recurring high-margin operating lease revenue from an investment-grade tenant. On the second 25 megawatts, design is nearly complete and construction is underway with the initial 10 megawatts expected this November and the remaining 15 megawatts expected in May 2027. As with the initial 25-megawatt deployment, ESS Metron's engineering and manufacturing capabilities are embedded in our delivery plan, supporting both schedule certainty and cost discipline. Beyond the contracted 50 megawatts, AMD retains expansion options for up to an additional 150 megawatts at Rockdale, providing a pathway to scaling this relationship to 200 megawatts over time. Slide 10 shows what Rockdale looks like today on a pro forma basis. In 2026, Riot has secured $9.8 billion of contracted data center revenue. With the leading Frontier AI Labs 191 megawatts contracted alongside AMD's 50 megawatts, Rockdale has evolved from a single-use Bitcoin mining site into a diversified data center campus, leased to 2 of the highest quality tenants in the AI ecosystem on long-term high-margin contracts. Looking at each lease at Rockdale in more detail, AMD will contribute approximately $63.6 million in average annual revenue and $51 million in average annual NOI on 50 megawatts with total capital expenditures of $170.2 million and reaching full deployment in May 2027. The Frontier AI Lab lease will contribute approximately $457 million in average annual revenue and $365 million to $411 million in average annual NOI on illustrative capital expenditures of $2.1 billion to $2.3 billion, reaching full deployment in June 2028. Combined, the 2 executed leases represent $520 million in average annual revenue and $416 million to $462 million in average annual NOI across 241 megawatts. When we acquired the land underlying the Rockdale facility, we had a vision that it could become one of the country's premier data center development campuses. That vision is now being realized. The tenant that chose Rockdale shared a common set of requirements, certainty of power at scale, access to hundreds of megawatts in a single location and a developer who executes on mission-critical time lines. Riot delivered on all three. In institutional real estate, the assets that command premium valuations share the same characteristics our portfolio now has, extended lease terms, investment-grade or equivalent tenant credit quality and mission-critical infrastructure. Importantly, we have also diversified our tenant base across 2 independent high-quality counterparties, which meaningfully improves the overall quality of our portfolio. This is the asset profile we are building at Rockdale. Before I hand the call over, I want to talk about Corsicana because the commercial momentum at that campus is significant. We are engaged in advanced commercial and design discussions and the full site is now under LOI to a single tenant. In parallel, we are continuing our development and procurement processes to derisk execution time lines. Development of our first core and shell building remains underway, and we continue to secure long lead items so that we can deliver full build-to-suit capacity on an accelerated basis once the lease is executed. Corsicana represents 1 gigawatt of fully approved power on Riot owned land, supporting a potential 756 megawatts of critical IT capacity. And we look forward to sharing more on our leasing progress there in the near future. While an LOI is not a signed lease, this milestone reflects the depth of demand for large-scale fully approved power in today's market and the confidence prospective tenants have in Riot's ability to deliver. Taken together, Riot now has approximately 1 gigawatt of capacity across our portfolio that is contracted or in advanced commercial discussions. Now I'd like to turn the call over to Jason Chung to review our financing strategy and the quarterly financial results.

Thank you, Jason. Our financing strategy remains anchored in the framework we've laid out on prior calls, lease to high-quality creditworthy tenants, allocate capital efficiently through the development and execution of our sites and recycle capital into the next wave of development. We match each asset to the right financing at each stage of its life cycle from land and greenfield development through lease-up and pre-lease construction to fully contracted stabilized assets that command the lowest cost of capital. This quarter, that strategy moved from framework to execution, and it rests on 3 pillars. First, a strong balance sheet. We ended the quarter with over $1.2 billion in total liquidity, $666 million in Bitcoin and $549 million in cash, which includes $77.5 million in restricted cash and 5,821 Bitcoin securing our $200 million credit facility, collateral that will be released as we repay. As we've talked about, we continue to utilize our Bitcoin as the primary source of funding for the equity component of our data center capital expenditures. We continue to sell all of our monthly Bitcoin production and have meaningfully sold down our Bitcoin inventory while increasing our cash on hand. The shift to a larger cash position on hand has given us an even greater degree of visibility and certainty in our liquidity position and future equity funding requirements. This strategy also reinforces our alignment with shareholders as we have not issued any common equity during the quarter. Second, capital recycling. Last quarter, we discussed the opportunity to extract significant value from the first 25 megawatts of AMD capacity. With that capacity delivered in May, the financing process has advanced to late-stage discussions with multiple banks, and we expect to close before the end of the third quarter. We anticipate debt proceeds to be nearly double our initial equity position, highlighting our disciplined underwriting and value creation. The facility will also include delayed draw capacity for AMD's second 25 megawatts and future expansion, further diversifying our capital sources while preserving liquidity for additional new investments. And third, capital redeployment. The initial 25-megawatt loan proceeds will be redeployed to fund the equity requirements of the Frontier AI lab lease at Rockdale, recycling lower-cost capital to higher return projects while extending the runway of our balance sheet and reducing reliance on external equity financing. Slide 13 lays out exactly how this disciplined capital allocation works in practice. And the key message is that Riot's financing strategy drives development growth and creates new funding sources for Riot, reducing the need for external equity financing for current projects. The table on the left illustrates our approach to the AMD financing. On the initial 25 megawatts delivered to AMD, we are nearing finalization of a term loan of approximately $180 million, sized against the stabilized value of the contracted asset. Against our initial $90 million CapEx budget, which we financed entirely with cash on hand, this new facility will generate approximately $90 million in net new capital for Riot, recapitalizing the deployment at approximately twice our initial equity contribution. On the second 25 megawatts, a $70 million delayed draw term loan at 85% loan to cost will fund $69 million of the expected $81 million in total CapEx, leaving a net equity requirement of only $12 million. This will enable Riot to shift a large majority of CapEx funding towards new sources while preserving our balance sheet liquidity for new projects. Moving over to the table on the right-hand side of the slide, we intend to recycle and redeploy this funding into our Frontier AI lab build-out, where illustrative capital expenditures range between $2.1 billion to $2.3 billion, anticipated debt financing in the 80% to 90% loan-to-cost range or $1.7 billion to $2.1 billion implies an equity requirement of between $210 million and $460 million. Net of the expected $180 million term loan proceeds from the AMD financing process, net equity required will be reduced to between $30 million and $280 million. That's against $1.2 billion of total liquidity on our balance sheet. While we finalize this financing process, we have also secured a $573 million interim financing facility from Morgan Stanley, which will be used to fund development costs for the project in the near term. This facility allows Riot to immediately advance the procurement of long lead equipment and fund other initial development costs without added delay or risk to our delivery time lines and while preserving our liquidity. These projects reflect our disciplined capital allocation. By utilizing our existing balance sheet and anticipated AMD financing process proceeds, we expect to fund the vast majority of our net project equity. As we compound through this cycle, we will retain ownership of high-quality cash flowing assets while continuously redeploying capital to fund additional growth and minimizing future external equity needs. Let's move to the second quarter financial update, key figures for which are outlined on Slide 15. For the second quarter of 2026, Riot reported total revenue of $174 million, a 14% increase year-over-year, driven by growth across our Data Center and Engineering segments. We recorded a GAAP net loss of $237 million or $0.68 per diluted share and an adjusted EBITDA loss of $70 million. As in prior quarters, these results reflect over $240 million in noncash items, chief among them, a $75 million mark-to-market loss on our Bitcoin holdings, $98 million of depreciation and amortization, and a $28 million impairment of mining-related construction items at Rockdale, a direct consequence of our decision to repurpose that capacity for data center development. In aggregate, these noncash items exceeded the entire net loss for the quarter and do not reflect the underlying economics of our operations. In our Data Center segment, we exited the quarter with 25 megawatts of critical IT capacity online and generated $23 million in total segment revenue, including $4.9 million in operating lease revenue, reflecting delivery of the full 25-megawatt AMD deployment in mid-May at an 84% operating lease gross margin, in line with what we've discussed with the market upon announcement of the deal. From signing in January to fully commissioned revenue-generating capacity in under 5 months represents the execution pace that our platform has been built to achieve. In our Bitcoin Mining segment, Riot produced 1,587 Bitcoin in the second quarter, equivalent to production of 17.4 Bitcoin per day and ended the quarter with a deployed hash rate of 44.4 exahash per second, accounting for approximately 4.6% of the global network. Bitcoin mining revenue was $113.7 million, with hash rate utilization averaging 87%, partially impacted by minor downtime in Kentucky during the month of May. Our power strategy generated $10 million in power curtailment credits, equivalent of $6,335 per Bitcoin mined, resulting in a net cost of power of $0.036 per kilowatt hour, which remains one of the lowest in the industry. Our direct cost to mine was $49,912 per Bitcoin this quarter, which continues to represent industry-leading efficiency despite a 9% year-over-year increase in the average global network hash rate. Our power portfolio and power management capabilities remain a fundamental part of the Riot story. We have always said that Riot is a power-first company and our net cost of power as well as our ability to manage our power trading reflect that industry-leading expertise. Finally, we ended the quarter holding 11,380 Bitcoin on our balance sheet with a quarter end value of $666 million based on a closing price of $58,527 on June 30. This represents a significant reduction in our Bitcoin holdings as we continue to utilize that inventory for data center development. As talked about in our financing strategy, our Bitcoin treasury is a key financial asset that we will continue to leverage in order to fund the development of our data center platform. On Slide 16, we turn to our data center segment results in more detail and present the second quarter results against the first quarter. Even in these early stages of our build-out, we see the beginning of the high-margin recurring revenue ramp that we have been pointing to. We delivered an 84% operating lease gross margin and grew AMD contracted capacity to 50 megawatts in the quarter. Recurring operating lease revenue grew to $4.9 million in the second quarter, up over 400% from $900,000 in the first quarter, driven by the delivery of the full 25 megawatts to AMD in May. That revenue generated $4.1 million in gross profit at an 84% gross margin. Tenant fit-out services revenue was $18.3 million, down from $32.2 million in the first quarter, generating $2.4 million in gross profit. Now as a reminder, fit-out revenue represents the procurement and installation of customer-specific equipment reimbursed by tenants on a cost-plus basis, and it will naturally fluctuate with the development cycle. In total, the Data Center segment generated $23.2 million of revenue and $6.5 million of gross profit in the quarter. And while total segment revenue was lower quarter-over-quarter on reduced tenant fit-out activity, gross profit grew 174% on the strength of the recurring lease revenue mix. This is exactly the evolution we've outlined. To put this trajectory in perspective, recurring lease revenue of $4.9 million this quarter builds towards approximately $64 million in average annual revenue and to approximately $520 million in combined average annual revenue after the Frontier AI lab development reaches full deployment, layering highly predictable infrastructure grade cash flows into our consolidated P&L. Our Engineering segment, ESS Metron and E4A Solutions continues to serve as a key competitive advantage driving our ability to deliver critical data center components and on a timely basis. Engineering revenue was $37.3 million in the quarter, more than triple the $10.6 million from a year ago, while gross margin expanded from approximately 7% to over 27%, with the data center sector representing approximately 90% of our $177.1 million backlog. Importantly, the conversion cycle of backlog into revenue has significantly accelerated as a result of the 25% increase in manufacturing capacity we brought online in 2026. We are also continuing to strategically hold back capacity for Riot's own data center growth. As a reminder, within our engineering business, ESS Metron manufactures low and medium voltage switchgear and power distribution units, among the most severely constrained long lead components in the data center supply chain. And while we are extremely pleased with the continued improvement in the financial results at ESS, the story has never been one of stand-alone profits. ESS and E4A are key elements of Riot's vertically integrated approach. With the execution of our data center deals, Riot Engineering is playing a key supporting role in the procurement process for our data center strategy. Through this process, we gained greater control over the supply chain, derisk delivery of scheduled critical equipment and generate meaningful CapEx savings, approximately $23.8 million cumulative acquisition of ESS Metron in December 2021 alone. This vertical integration was a key factor in our on-schedule delivery of the initial AMD capacity, and it is now fully integrated into the delivery plan for the Frontier AI lab build-out. Now I'd like to turn it back over to Jason Les for closing remarks.

Thank you, Jason. I want to close by putting the pace of our execution into perspective. In January, we announced the Rockdale land acquisition and the execution of our first data center lease with AMD. In May, we completed AMD's initial 25 megawatts. Today, we announced a 191-megawatt, $9.1 billion lease with another one of the most consequential AI companies in the world. Looking ahead, AMD's expansion completes in May 2027 and the leading Frontier AI Labs phase deployment begins with 96 megawatts in December 2027 and completes in June 2028, bringing us to 241 megawatts of delivered contracted capacity. Layer in the LOI now signed for the full Corsicana campus, and we have line of sight to approximately 1 gigawatt of leased critical IT capacity across a total power portfolio of more than 2 gigawatts of utility power. With the AMD and Frontier AI lab lease executed, we have contracted approximately $416 million to $462 million in estimated average annual NOI. The 4 themes that define this quarter are the ones that will define Riot going forward, rapid delivery, derisked execution and a strong balance sheet and disciplined capital allocation. Our priorities for the balance of 2026 directly follow: deliver contracted megawatts to AMD and advance the AI lab build-out on schedule and on budget; convert our Corsicana LOI into an executed lease; close low-cost project financing that reflects the quality of our tenants and our sites. Beyond that, we remain active in pursuing growth of our power pipeline, and we'll look to make accretive additions that compound value in our portfolio. Riot sits at the intersection of 2 defining constraints of the AI era, power and execution. As we continue converting our power portfolio into contracted data center leases with the highest quality counterparties in the world, we believe the quality, scale and cash flow visibility of our platform will become increasingly evident. We have the assets, over 2 gigawatts of utility power and 2 of the most attractive data center development sites in the United States. We have the balance sheet to fund development on value-accretive terms, supported by our financial strength, our operating cash flows and access to institutional capital markets. We have the team, a world-class data center organization that is delivering for AMD, building for the leading frontier AI lab and advancing our next wave of leasing discussions. And we have a repeatable approach, lease to creditworthy tenants, finance efficiently, build with discipline and recycle capital, an approach that is designed to compound through multiple deals and multiple sites. On behalf of our entire management team, I want to thank our shareholders, our partners and our employees for their continued support as we execute on this exciting opportunity. With that, we will now open the call up for questions. Operator?

[Operator Instructions] Your first question comes from the line of Stephen Byrd with Morgan Stanley.

Congratulations on the deal and the LOI. It's very exciting. That's great news. I wanted to just start on the economics of the deal. And I wondered if you could just maybe speak to the CapEx range, sort of how you arrived at that range for CapEx.

Sure. Thanks for the question, Stephen. So the new lease at Rockdale has a total initial base contract value of $9.1 billion in revenue over the term, which is a little longer than 20 years following the initial deployment. And this lease, like most of the leases we have seen, carries annual escalators that are in line with the market precedents out there. Our NOI margin is expected to be between 80% to 90% over the term of the lease. We have some good experience already operating at Rockdale for AMD, and we have spent a lot of time assembling a very strong operations team that helps formulate this guidance. We have really invested a lot in building out this operations team over the past year or so. Now to your question on the CapEx side, the illustrative range that we shared benefits from 3 elements. One, we have spent quite a bit of time between our teams as well as the tenants on design work to know exactly what we're building and how what we're building is going to meet that tenant specifications. Two, we have done a fair amount of work on procurement of long lead items because we already have this design outlined. We've been able to make progress on that. So we have strong visibility on what pricing will look like for all of the individual components. And then finally, we have been working collaboratively with a general contractor who has worked on projects for this tenant before and has given us visibility to help firm up these figures. So this has allowed us to have really good clarity on labor availability and pricing to fully deliver the projects. And when you take all of these factors together, it allows us to have a really good sense of CapEx, which I'll add, includes a healthy contingency reserve because there's already been a good amount of effort on the planning and preparation of this deal over the preceding months by both of our teams. Where all of these combine out on a return on cost perspective is very strong, especially for a customer with both the profile and the trajectory of a leading frontier AI lab. It's also, I think, a reflection of the continued and ever-improving strength of the market and demand for this type of large-scale infrastructure that comes with the level of certainty in power delivery that Riot is able to offer.

That's fantastic. That's really helpful. And I wonder if you could just talk about the bridge financing that you've arranged. And I just wanted to confirm, will that be sufficient to cover sort of the near-term build cost that you're going to be incurring here?

Jason Chung, do you want to take that?

Sure. Thanks, Stephen. On financing, the structure we put in place has deliberately been set up in stages. So the Morgan Stanley interim financing facility immediately funds long lead equipment, procurement and other development costs related to this tenant lease and interestingly, is fully secured by the tenant so that near-term build costs come with that tenant credit support from day 1. Then from there, we plan to execute the takeout financing of this interim facility in the coming months as the investment-grade backstop is completed. And there, we anticipate pricing consistent with the growing number of backstop AI infrastructure deals we've seen in the market. This lease has been structured with financing in mind from day 1, and we have multiple paths to attractive long-term financing regardless of how the credit support process concludes. That said, we do expect it to conclude in the near term and diligence is well advanced. So I don't want to get ahead of that process by discussing parties or terms just yet. What I'd point to you to is the outcome, which is we are confident in achieving investment-grade level financing economics for this project.

Your next question comes from the line of John Todaro with Needham.

Congrats on the lease there. It looks like a pretty good economics per megawatt. I wanted to ask on Corsicana. Nice to see the LOIs for the full site, and it's going to be with one tenant. That is something you guys have talked quite a bit about in the past that the full site would go to potentially one tenant. I would think that suggests hyperscaler, but any additional color on that and then also how the discussions on Corsicana have evolved over time?

Sure. First off, John, it's funny to think back on previous earnings calls or I've been asked and we've been reticent in disclosing LOIs historically. But I will add that every deal that we've announced previously had an LOI at some point before progressing to a lease, and we chose not to disclose that. As everyone knows, LOIs are subject to uncertainty, but we feel very strongly about our progress here. In this case, we wanted to share with the market that we are under LOI for the entire site with a single tenant to try and give transparency about the process. And I think it's a testament to our progress with the counterparty on working towards a signing completed deal. Riot has taken a very calculated approach with marketing this asset because it is our most valuable and in-demand asset. I'll remind everyone that it wasn't until the end of 2025 that we had really acquired all the necessary acreage to have the physical footprint in order to build a full cohesive Tier 3 data center campus that utilizes all of the 1 gigawatt power at Corsicana and met the design requirements of today's market. So because of this, we didn't begin fully marketing the site with a comprehensive plan in place until the beginning of this year. We wanted to be sure before getting in front of prospective tenants, and we've spoken about this, that we had a well-thought-out plan in place that could withstand the most rigorous diligence processes that you'll find from the highest quality -- high-quality counterparties out there. This has led to a number of conversations with a variety of parties, and we've been very intentional about focusing our efforts on the right counterparties. When you're working with a site that is the scale of Corsicana, it is extremely in depth, and it's not a small undertaking for any potential tenant. When you look at what a lease sign for Corsicana could look like for the entire site, you're looking at in excess of $1 billion in annual rent upon full deployment. So you can appreciate that no matter how well positioned the site is, both parties need to be absolutely careful of what the ultimate deal looks like in order to receive the best possible outcomes. That's a 2-way street there. So it's a tremendous investment from both sides. And that process requires an immense amount of technical development, construction, operational, legal and commercial-related discussions, even much more than our previously announced deals at Rockdale. So we've been deeply engaged in this process. We have a target tenant that we've committed to in the process that we've executed an LOI with. We caution and we're well aware that this process can still take a number of twists and turns, and it's subject to uncertainty. But we want to be transparent about our progress, and we will update the market in the coming months when there's more to share about this process.

That's great. Very helpful and a lot of color there. And then just as a follow-up on the same site, can you just go a little bit more into the current state of development, if there's really kind of anything at the base level that still needs to be done to support the full gigawatt and how that phasing of capacity would look?

Yes. So we are -- while we're in the deep active discussions that we have, we've continued on the development of the site in Corsicana. That's been important in order to advance progress that ultimately results in delivering Tier 3 capacity. Now we're not committing ourselves to designs or decisions or spends that are going to box us into a certain tenant specifications or design. We are proceeding with horizontal work and long lead equipment procurement for items that we're confident will support any eventual tenant's requirements, whether it is for current LOI or otherwise. I think it's -- as far as the RFS states go, I think it's probably too early to comment on that specifically because Everything is subject to final design choices, specifications and the negotiations that come with that. And as you go through this process and you go through various revisions of a tenant's design, you make trade-off choices between delivery dates and certain features or requirements that may take a little longer to deliver. So there's always this push and pull discussion that we have with our customers that will meet what they need from a time line and technical perspective. These are active discussions. They're happening on a regular basis. And yes, we look forward to continuing progressing them to a lease.

Congrats again on all the progress guys.

Your next question comes from the line of Paul Golding with Macquarie Group.

Echoing the congrats on all the progress. I wanted to ask maybe around Rockdale. Could you remind us of the structure of the remaining AMD options? I know you mentioned, Jason, that you still have 150 megawatts of options outstanding. But maybe in addition to sort of talking through how those are structured, if you could also give some color around whether this incremental AI Frontier lab lease for 191 megawatts impacts those options or the dynamics with AMD at all. Obviously, the pricing is quite strong with this recent announcement and just looking to see how that might impact the AMD options or not.

Thanks, Paul. So first on AMD options. So they have 2 options in their lease. The first of which is an expansion option for an additional 50 megawatts. And that would bring, if exercised, their total IT capacity at Rockdale to 100 megawatts. We signed an initial 25-megawatt lease with them in January. They executed a 25-megawatt amendment to that in April. And now there's 50 megawatts remaining on that original 100-megawatt option. And this additional 50 megawatts would largely be the same type and build-out and economics as their existing 50 megawatts. AMD's second option is for an additional 100 megawatts of capacity that can be leased only if they fully lease the first 100 megawatts of the lease. And this second 100 megawatts of capacity is subject to a few different restrictions and guardrails that are important for maintaining flexibility for Riot. While on AMD, one thing I do want to highlight is that AMD had a really interesting feature on CNBC recently of all the advancements that they're making in their AI hardware business. And a lot of that interview was done at our Rockdale campus and what they are now referring to as their Megalab. And what's really exciting for us is that they say in this interview that they are using this Megalab to test and commission their brand-new Helios Rack AI platform. If anyone is interested, we have a slide in our appendix of our presentation. There's a few interesting screenshots from that piece and a link to the interview that shares a lot of good information about what they're doing. But I think the second part of your question was, does this new deal at all impact AMD's position on its expansion options? We can't comment on or speculate on the motivations of our tenants. However, if you look at what AMD has stated publicly that even if the -- the entire expansion option went to AMD, it would -- based on public statements, it would still not be enough to fulfill their power demand. So we have 700 megawatts of capacity out at Rockdale, and we are progressing with commercial discussions across that site and at Corsicana. And our primary strategic objective is to lease up this full portfolio.

And maybe just a quick follow-on to that. With the 25 megawatts where the design is nearly complete for AMD at Rockdale. Just on that phrasing of the design still being nearly complete, is there -- are there different terms or, I guess, incremental economics from a design being any different than the preceding 50 megawatts? How should we think about that?

I am not sure the exact comments that you're referring to. What I meant to clarify is that the first 100 megawatts are for a certain type of design that we've executed on with them, the one -- it's a lower CapEx, quicker time line deployment. That covers the whole 100 megawatts. The second 100 megawatts has a bit more flexibility to build a new type of capacity, whatever they would be looking for, for their specifications. So if we were -- when we get to the point when they fully execute their -- I should say, if we get to the point where they fully exercise their first 100-megawatt option and then they want to be talking about the 100 megawatts, part of that then would be engaging with them on the design that they're looking for.

Your next question comes from the line of Mike Grondahl with Northland Capital Markets.