Z Squared Acquires AI Data Center Assets for $25M

Z Squared Inc. is significantly expanding its footprint in the artificial intelligence infrastructure arena through a definitive agreement to acquire Paradox Data, LLC. This strategic move, structured as an all-stock transaction valued at up to $25 million, underscores Z Squared's commitment to building out robust data center capacity tailored for the demanding needs of AI workloads.

The core of this acquisition is Paradox Data's substantial development project in El Dorado, Arkansas. The Union County Campus, situated at 713 Industrial Road, is positioned to become a key asset in Z Squared's growing portfolio. The site currently benefits from an existing power arrangement with Entergy Arkansas, providing 8.0 MW of capacity. Crucially, an executed land contract allows for expansion, paving the way for a potential build-out reaching up to 150 MW of AI-ready power.

This transaction is designed with a performance-based incentive structure. An initial issuance of $5 million in Series A Convertible Preferred Stock will occur at closing, with a conversion price set at $7.45 per share. The remaining value, up to $20 million, is contingent upon achieving specific development milestones. These benchmarks are tied directly to the energization of power capacity, starting at 0 MW and progressing through 50 MW, 100 MW, and ultimately 150 MW thresholds. Notably, the deal avoids any cash outlay or new debt for Z Squared.

The Union County Campus acquisition directly supports Z Squared's Phase 1 objective of establishing 100 MW of AI-ready capacity across its U.S. locations. This Arkansas facility is envisioned as a critical hub, leveraging both utility-provided power and on-site generation solutions to ensure reliable and scalable energy for intensive AI computations. The company's strategy emphasizes "scale with discipline," as highlighted by CEO David Halabu, focusing on execution-aligned compensation and a debt-free operational model.

The market for AI-specific data center infrastructure is experiencing rapid growth, driven by the exponential increase in AI model training and inference demands. Companies are actively seeking specialized facilities that can provide the high-density power, cooling, and connectivity required. Z Squared's expansion into Arkansas positions it to capture a share of this expanding market, which is projected to see significant investment in the coming years as AI adoption accelerates across industries.

Jeffery Harris, Chief Technology Officer at Z Squared, is leading the critical workstreams involving utility integration, generation development, and customer engagement for the Union County project. The company has also enlisted A2 Advisors as a strategic partner to guide site development, project execution, and capital strategy, signaling a focused approach to bringing this significant capacity online efficiently.

The parties are aiming for a swift closing, targeting completion within 30 days of the agreement's signing. An outside date of September 30, 2026, with a potential extension to December 31, 2026, has been established, reflecting the urgency and commitment to advancing this strategic AI infrastructure project.