Riot's $28B AI Data Center Lease, Fact-Checked

The headline says Riot's new $28B AI data center lease shifts site construction costs to the tenant. Riot's press release says Riot "will fund $2 million per IT MW for site work and electrical infrastructure." Both sentences claim to describe the same lease.

Verdict: false. Riot funds $2 million per IT MW of site work and reimburses the tenant $4 million per IT MW for modules, which adds up to $5.5 billion of hard costs on Riot's side.

Riot delivers the pads and the tenant brings the compute

Corsicana is a 15-year, 910 critical IT MW triple-net powered land lease with an unnamed "leading Frontier AI Lab." Riot delivers "the land, the power infrastructure, and the powered pads" and keeps owning the high- and medium-voltage infrastructure. The tenant "will procure, install, own, and operate the modular compute deployment."

Riot's slides split the money the same way. Reimbursements to the tenant run $3.6B at $4.0M per IT MW, and site work runs $1.8B at $2.0M per IT MW, for $5.5B in total. The footnotes call the site work and electrical upgrades "completed by Riot." They call the $4M per IT MW "funded by Riot as a reimbursement to tenant for tenant's actual costs."

What the tenant does take on

The tenant "will bear substantially all operating costs, including power costs as a pass-through." Riot's documents also list property tax, insurance, site maintenance, security and lifecycle capex. Rent is payable on the full 910 MW irrespective of utilization.

CEO Jason Les describes the benefit differently from the headline. The project needs "about half the capital of a Tier 3 build while significantly limiting procurement, development, and ongoing operational risk to Riot." Riot's materials put its Rockdale Tier 3 build at $11 million to $12 million per IT MW, against Riot's own figure of $6 million per IT MW at Corsicana.

Nothing in Les's sentence says the tenant pays for anything. The headline turned a claim about Riot's lower capital and risk into a claim about who gets the bill.

The tenant builds the compute, but Riot still writes the $5.5B check

The best defense of the headline is about who does the work. The tenant procures and installs the modules, the largest workstream on the site. Riot reimburses the $4M per IT MW "in phases, after each phase is delivered and paying rent," so the tenant spends first.

My reading is that the tenant carries the cash until Riot pays it back. The slides also show reimbursement of "up to $3.64B" for "tenant's actual costs," in a garbled table. I infer that spending above the ceiling would sit with the tenant, though no document says so. In the fallback path the tenant funds the reimbursements itself as each phase is delivered. A reader has fair grounds to say the occupant handles construction.

Building and paying are still separate things, and Riot's documents separate them in the same sentence that names the tenant's role. Riot reimburses actual module costs, so the tenant's outlay comes back. The fallback applies only "if financing on comparable market terms is not available." Even then the tenant recovers the money as a rent credit at an implied 12% per year. I read the credit as a loan repaid through rent, which is a different thing from a construction bill.

The overrun question stays open. No lease text is in the research, so I do not know who absorbs spend above the ceiling.

The $28B is a gross number

The $28 billion is a 15-year contract value with 3% annual escalators, stated "before amortization of reimbursements to tenant." Average annual rent is $1.8 billion. The $54 billion figure needs both five-year extensions exercised.

Under the fallback path Riot earns "Contracted rent net of credits." No document quantifies that net. Riot's 99% NOI margin and 33% unlevered yield on cost are Riot's own estimates.

The risk Riot kept is the borrowing

The base path is $4.4–4.9B of non-recourse project debt, sized to contracted rent, plus $0.5–1.1B of Riot cash equity. Combined Corsicana and Rockdale cash equity is $0.8–1.5B, against near-term liquidity of $1.2B. Riot expects no equity issuance for announced projects. It sold 20,264 bitcoin year-to-date for $1.5 billion, "primarily to fund data center development."

Financing has not closed. Riot's slides cite a "higher interest rate environment" and "more selective lenders," and they disagree with each other on timing. One says financings are "in process" and another says the process will "launch 2027."

Rent on each phase starts no later than 60 days after its powered pads are delivered. The first 400 MW is due in September 2027, the same year the financing process launches.