WhiteFiber Signs $865M, 10-Year Colocation Deal with Nscale for NC-1 Data Center

What happened

WhiteFiber announced a 10-year colocation agreement with Nscale for 40 megawatts at its NC-1 AI data center campus, representing approximately $865 million in total contract value. This deal secures the first major customer commitment for the flagship NC-1 site, which is part of the company's staged development pipeline focused on AI and high-performance computing. However, the DeepValue master report highlights that WhiteFiber is an early-stage player with high execution risks, including dependencies on funding, permits, utility power allocations, and third-party technology. Near-term milestones, such as completing MTL-3 in Q4 2025 and energizing the first 24 MW of NC-1 in Q1 2026, must be met on schedule for revenue to commence in May 2026. While this news validates demand, it does not address the company's current cash burn of $6.8M in operating outflow or the uncertainties in project delivery.

Implication

The Nscale agreement provides a long-term revenue stream for NC-1, potentially enhancing future cash flow visibility and supporting the demand thesis for AI data centers. However, WhiteFiber must still secure funding for its $131M PP&E spend and overcome permitting and power allocation hurdles to deliver the capacity. Current liquidity of $16.4M cash is tight against ongoing cash burn and capex, likely necessitating additional capital raises before revenue kicks in. Any delays in project timelines could defer the $865M contract's value realization and increase costs, exacerbating financial pressures. Investors should closely monitor energization milestones like MTL-3 completion and funding progress, as these will be critical for translating this contract into sustainable earnings.

Thesis delta

The Nscale contract adds visibility to NC-1's commercial potential and aligns with secular AI data center growth, supporting the upside case. However, it does not materially alter the high execution risks, near-term cash pressures, or dependencies on external factors outlined in the DeepValue report. The investment stance remains HOLD/NEUTRAL, pending proof of energization milestones and secured funding to de-risk the path to monetization.