X2M signs agreement for 10MW AI-enabled data centre in Queensland
X2M Connect Limited (ASX: X2M) has signed an agreement with a Queensland developer (the “Developer”) for a 10MW AI-enabled data centre site with development approval. X2M intends to deliver and manage the facility under its Managed Delivery service.
X2M has been granted binding exclusivity over the data centre site and its power capacity for 60 days. Commercial terms are still to be agreed, with binding long-form agreements targeted within 90 days, so the arrangement is a signed agreement rather than a completed long-form contract.
Key facts from the announcement:
- 10MW AI-enabled data centre site with development approval
- $250m estimated project cost
- 60-day binding exclusivity over the site and its power capacity
- 90-day target for binding long-form agreements
The approvals and power already in place are expected to deliver faster commercialisation.
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Grid connection and approvals already in place
Staged power build to the full 10MW
The site has an existing 2.5MW grid connection, together with local government development approval for a data centre. The facility will be delivered in stages, with the initial stage using the existing grid capacity.
The Developer intends to build behind-the-meter renewable generation to supply the final 7.5MW under a power purchase agreement, taking the facility to the full 10MW. This power is expected to be available to the site by the end of the 2028 calendar year, and the announcement also refers to power being generated on the site for 10 years.
Mohan Jesudason, Chief Executive Officer
“…this site already has energy and local government approval in place, with planned behind-the-meter generation to carry it to the full 10MW…”
X2M expects the existing approvals and power to result in earlier project completion and revenue recognition.
How X2M expects to earn from the project
The 10MW data centre is planned to be delivered through X2M’s compute and GPU partnerships. It is currently expected that X2M will manage the elements of the full project cost and earn a margin on the project.
X2M is also expected to earn recurring revenue from AI-enabled management of the facility, along with a potential token revenue share. The announcement does not disclose revenue figures.
The $250m is the estimated project cost, not X2M revenue.
Managed Delivery covers the design, engineering, supply, installation and commissioning of the facility. This is followed by ongoing AI-enabled platform services and management for the life of the asset.
Why AI-enabled data centres need less power
Data centres depend on electricity, and available grid capacity limits the pace of data centre build-out. Energy is described in the announcement as the binding constraint on data centre growth.
X2M’s AI-enabled platform is expected to produce the same compute from fewer electricity megawatts. It is intended to manage energy, cooling and environmental systems across both grid-supplied and behind-the-meter supply.
Behind-the-meter generation refers to on-site power generation. X2M looks for developers and customers able to build their own behind-the-meter micro grid, which gives the facility energy security independent of the grid.
According to the announcement, more compute from every approved megawatt is a key reason customers partner with X2M.
Regional strategy and 20MW now under agreement
A de-risked regional approach
X2M is targeting data centre facilities in low-density population regions of Queensland and the Northern Territory, rather than large metropolitan campuses. This places less demand on the grid and requires a smaller capital commitment.
As part of its due diligence process, power, land and government approval are assessed at every site before a binding agreement is signed.
Pipeline progress
Together with its first binding agreement (ASX: 27 August 2026), X2M now has 20MW of data centre capacity under agreement. The aggregate estimated project cost is more than $500m.
The first binding agreement carried an estimated project cost above $250 million and was conditional solely on development approval, with X2M expecting to recognise the full project cost as revenue and earn a margin.
The prospective pipeline remains above 200MW, with the majority of sites in Queensland. This pipeline comprises a series of non-binding agreements, so it should not be read as contracted capacity.
| Agreement | Capacity | Date or status | Estimated project cost | Notes |
|---|---|---|---|---|
| First binding agreement | 10MW | ASX: 27 August 2026 | Not separately disclosed | Design work confirmed initial capacity of 10MW |
| This agreement | 10MW | 23 October 2026 | $250m | Binding exclusivity for 60 days, with long-form agreements targeted within 90 days |
| Total under agreement | 20MW | n/a | More than $500m (aggregate) | Alongside a pipeline above 200MW |
Next steps centre on converting the balance of the pipeline, including the partnership agreements already announced, and on delivery. Mohan Jesudason said: “Our focus is now on delivery and on converting the balance of our pipeline, including the partnership agreements already announced.”
Investors exploring how the pipeline might convert into binding agreements can read our detailed coverage of the Gateway DC partnership, which outlines the 120MW initial campus, the 2GW+ roadmap and the due diligence under way on X2M’s prospective sites.
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