Hyperscale Data (GPUS) subsidiary, Alliance Cloud Services, entered into a master services agreement with a California-based neocloud provider to deliver co-location and related data center services at its Michigan campus, the company said Wednesday.

The agreement initially calls for the deployment of 20 megawatts of artificial intelligence compute capacity, which is expected to become operational in Q4, the company said.

The customer has the option to expand capacity to a total of 52 megawatts, the company said, adding the 10-year contract includes two five-year extension options, and could generate more than $1.2 billion in revenue if maintained through the maximum term.

Hyperscale Data said total contract revenue could exceed $3 billion if the customer exercises its expansion option and the agreement remains in place through the extension periods.

To support the initial deployment, the company said Alliance Cloud Services has begun retrofitting about 60,000 square feet of its Michigan campus at an estimated cost of $100 million to $120 million.

Hyperscale Data said it plans to gradually re-allocate power currently used for bitcoin mining at the site to AI computing workloads as capacity comes online.