Z Squared to Acquire Full Ownership of Paradox Data and Its Arkansas Data Center Campus

Cryptomining firm Z Squared Inc. has signed a definitive agreement to acquire 100 percent of Paradox Data, gaining full control of the company's Union County data center campus near El Dorado, Arkansas. The transaction marks a significant step in the Nasdaq-listed company's pivot from digital asset mining toward AI and high-performance computing infrastructure.

The revised agreement expands on a deal first announced in June, under which Z Squared had planned to acquire a 51 percent stake in Paradox for $5 million. Under the new terms, Z Squared will issue $5 million of Series A convertible preferred stock at closing, with the potential for an additional $20 million in preferred stock if the campus meets four development milestones tied to capacity growth and customer commitments.

The first $5 million milestone payment is linked to the initial energization of AI compute capacity at the existing site, or alternatively, to Z Squared requesting that the seller vacate the current building. Subsequent payments are tied to the campus reaching 50MW, 100MW, and 150MW of capacity. At each threshold, $2.5 million would be awarded when Z Squared receives a binding service request from an AI customer, followed by another $2.5 million once the capacity is energized.

The transaction requires no cash payment at closing and is not being financed through debt. CEO David Halabu noted that 80 percent of the potential consideration would only be earned if the development milestones are achieved, aligning seller incentives with the successful build-out of the campus.

The site, located at 713 Industrial Road, currently operates under an interruptible service agreement with Entergy Arkansas covering up to 8MW. Paradox also holds a contract for adjacent land, while Z Squared plans to combine utility power with on-site generation to support the proposed expansion. The company previously said it aims to develop a 170-acre campus with up to 150MW of capacity for AI and high-performance computing workloads, using immersion cooling for high-density deployments.

Z Squared has engaged digital infrastructure consultancy A2 Advisors to support development planning, project delivery, vendor selection, leasing, and capital strategy for the campus. The company's chief technology officer, Jeffery Harris, holds an indirect minority interest in Paradox Infrastructure, the seller, with an SEC filing listing Harris as holding a 20 percent indirect interest.

The transaction remains subject to closing conditions, including the transfer of property and associated assets to Paradox Data. The parties expect the deal to close within 30 days of signing, with an outside date of September 30, which can be extended to December 31 under certain circumstances.

Florida-based Z Squared operates cryptomining equipment across sites in North Carolina, South Carolina, and Iowa. While historically focused on mining Dogecoin and Litecoin, the company is expanding into power generation and AI/HPC data center development. Z Squared is also working to acquire SkyCore Digital, which operates three North Carolina sites offering 24MW of energized capacity and a potential build-out of up to 42MW.

The acquisition comes amid regulatory headwinds in the region. Union County, where El Dorado is located, has approved a data center moratorium running from July 2026 to 2027, and the city of El Dorado has introduced its own moratorium against data centers, effective through November 2026. These measures could affect the pace of development, though Z Squared's existing agreements may provide some buffer.

The deal underscores a broader trend of crypto miners repurposing their power infrastructure and site portfolios for AI workloads, a shift that has gained momentum as demand for AI compute capacity continues to outpace supply across North America.