Z Squared is now betting its future on an "acquire-and-convert" model, targeting grid-connected facilities that can be repurposed for AI-ready colocation. The company’s first major move is the proposed acquisition of Paradox Data in Union County, Arkansas. The site currently offers 8 megawatts of energized capacity, with long-term plans to reach 150 megawatts through a combination of utility supply and on-site generation. This aligns with the firm’s broader goal of securing 100 megawatts of capacity across several U.S. locations.
Z Squared CEO: In the AI Gold Rush, Power is the True Scarcity
For David Halabu, CEO of infrastructure firm Z Squared, the race to build AI capacity is being derailed by a fundamental bottleneck: the power grid. As grid interconnection queues stretch up to five years, Halabu is pivoting his company away from digital asset mining toward acquiring pre-energized sites.
Halabu emphasizes that the company will avoid the delays of greenfield development by prioritizing sites where electricity is already flowing. While the company is currently debt-free with a year of operating runway, scaling this infrastructure will require disciplined capital deployment tied to specific milestones and customer commitments. The Paradox deal, structured entirely in stock rather than cash, serves as a test case for this strategy. Investors will be monitoring four key metrics to gauge success: the closing of the Paradox deal, the signing of the first major tenant, the expansion of Union County’s energized capacity, and the ability to grow the site pipeline without taking on debt.
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