AI infrastructure developer 1606 Corp. has signed a non-binding term sheet to acquire a 55MW power generation facility and a 50,000 sq ft (4,645 sqm) warehouse in Lufkin, Texas, where it plans to develop a data center.

The deal would see the company acquire approximately 132 acres of land, along with associated equipment, permits, entitlements, and other infrastructure.

According to the company, the facility will be designed to operate as a behind-the-meter generation asset, supplying on-site power for AI and high-density data center workloads. While not disclosed, the facility is likely to be powered by natural gas.

The deal is expected to be completed for approximately $11.67 million, comprising $7.5m in cash and the assumption of roughly $4.17m in existing debt tied to the plant.

The parties have agreed to an exclusivity period during negotiations of definitive agreements, with closing targeted for on or before March 11, 2026, subject to final documentation and customary conditions.

1606 Corp said the acquisition would form a core asset within its strategy to build a portfolio of energy infrastructure serving AI and data center demand.

“This transaction represents a key milestone in executing our strategy to develop a scalable portfolio of energy infrastructure assets capable of supporting next-generation AI and data center demand,” said Austen Lambrecht, CEO and chairman of 1606 Corp. “We believe this acquisition strengthens our long-term cash flow potential and positions the Company to pursue higher-tier exchange listing standards.”

In addition, 1606 said it is in negotiations to acquire Sim Agro Inc., a private power plant operations and energy infrastructure company. If the transaction goes ahead, the company is expected to oversee operations at the Texas facility and support the company’s broader generation platform.

1606 Corp was founded in 2019 and is headquartered in Phoenix, Arizona.

Lufkin, some 120 miles (193km) north of Houston in Angelina County, could see another large data center campus developed. Amp Z is looking to develop a multi-gigawatt site at a former paper mill.