What a letter of intent covers in a datacenter capacity deal

A letter of intent, also called heads of terms or a term sheet, writes down the main commercial points both sides have agreed in principle: what capacity, where, from when, for how long and roughly at what price. It is the bridge between a first conversation and the full contract, so neither side spends legal fees on a deal that was never really agreed.

• The capacity: IT power, density, redundancy and cooling, or GPU model and count.
• The site and the ready date, and how capacity ramps up over time.
• The term, the price unit and the indicative price.
• Conditions, such as board approval, financing or a site visit.
• A timetable to the signed contract.

The deal terms are usually not binding: either side can still walk away until the contract is signed. A few clauses normally do bind from signature: confidentiality, exclusivity if agreed, who pays which costs, and the governing law. Writing that split down plainly avoids arguments later about what was promised.

Usually after a mutual NDA and a first technical call or site visit, once both sides know the site can meet the need. For capacity that is still being built, operators and their financiers often ask for one from an anchor customer before they commit to equipment and construction.

Once both sides say yes and names are revealed, the deal room follows the same order: NDA, then letter of intent, then contract. Our letter of intent template is a starting point to adapt with your lawyers, not legal advice.