A bold infrastructure initiative in Louisiana is reshaping the market position of Hut 8. The company has unveiled plans for a major artificial intelligence data center campus, representing a total investment of $10 billion. At the core of this venture is a 15-year lease agreement valued at approximately $7 billion, prompting analysts to question whether this move establishes Hut 8 as a serious contender in the hyperscale computing arena.
Financial Backing and Market Response
The project’s financial structure appears robust. Technology giant Google is providing a financial backstop for the full 15-year term of the lease obligations. For project financing, Hut 8 is expected to partner with J.P. Morgan and Goldman Sachs, with a proposed debt financing setup covering 85% of the construction costs. The financing package includes three five-year extension options.
The market’s reaction was immediate and pronounced. Following the initial lease announcement, the company’s shares surged 21% in a single trading session. Year-to-date, the stock has advanced roughly 80%. Trading activity remains high as institutional investors reassess the company’s valuation within the high-performance computing sector. Reflecting this strategic shift, Canaccord Genuity raised its price target from $54 to $62 per share, maintaining a ‘Buy’ rating.
Should investors sell immediately? Or is it worth buying Hut 8?
Project Specifications and Scale
Dubbed the River Bend Campus and located in West Feliciana Parish, the facility is designed for an initial IT load of 245 megawatts. Power capacity is secured for an initial 330 megawatts. Construction is already underway and is expected to employ over 1,000 workers at its peak. A significant element of the agreement is a right-of-first-offer for an additional 1,000 megawatts of capacity. If all extension options are exercised, the potential total value of the contract could reach $17.7 billion.
Strategic Partnerships and Technical Focus
Hut 8 is not undertaking this project alone. It has announced key partnerships with AI firms Anthropic and Fluidstack. On the technical and engineering side, the company is collaborating with established service providers including Vertiv and Jacobs. These alliances underscore a dedicated focus on high-density computing capacity and specialized infrastructure necessary for power-intensive AI model training and operations.
Future Trajectory and Capacity
The agreements provide a clear pathway for scalability. In an optimistic scenario, the campus’s total capacity could expand to as much as 2.3 gigawatts, potentially propelling Hut 8 into the ranks of larger data center operators. The company’s future success in this endeavor hinges on the timely execution of its construction and financing plans, coupled with the actual growth in demand for high-density computational power. Should the extension options be activated and financing secured as outlined, the contractual volume would see a substantial increase to up to $17.7 billion.
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