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Contract library · Colocation and hosting

Sublicensing the space to a GPU cloud

Can the customer pass the space to a GPU cloud, and who keeps the risk?

Supermicro signed the 21 MW Vernon contract and, the same day, sublicensed all of it to Lambda for a margin above the charges. Supermicro stays liable to the provider for the full term. The sublicense gives Lambda none of the customer’s termination, set-off or abatement rights, and ends if the master contract ends. Enovum lets Nscale transfer to an affiliate, or on a merger or sale of the business, without consent.

Randeep Bubbra | Lawyer | Making the next generation of infrastructure financeable · Firm profile ·

What the filed contracts say

ContractWhat the filed wording says
Vernon service orderThe provider consented to the Lambda sublicense. If it ends, the provider may refuse a replacement only on listed grounds, including weaker credit after a decline in the customer’s own.
Vernon colocation MCSAA transfer never releases the customer, which stays primarily liable for all charges.
Supermicro / Lambda sublicenseLambda pays the master charges plus a percentage margin (the rate is redacted) for the whole term.
Supermicro / Lambda sublicenseLambda gets none of the customer’s termination, set-off, abatement or extension rights, and looks to the provider for its performance.
Supermicro / Lambda sublicenseIf the master contract ends without either party’s default, the sublicense ends too.
Supermicro / Lambda sublicenseLambda may not assign or sublicense without Supermicro’s consent in its sole discretion, and any profit on a transfer goes to Supermicro.
Enovum / Nscale MSAConsent to assign may not be unreasonably withheld, and none is needed on a merger, a sale of the business or a transfer to an affiliate. Nscale stays liable either way.

The filed wording

if the Initial Sublicense terminates prior to expiration of the Service Term, provided that the entity designated as the “Customer” herein, or its Successor (defined below), shall continue to be the Customer under this Service Order (and the corresponding Agreement) Supplier shall not withhold its consent to any proposed sublicense by Customer of all of its rights under this Service Order (and the corresponding Agreement) to a third party unless: … (e) if there has been a material decline in Customer’s financial strength and/or credit the proposed transferee does not, in Supplier’s reasonable determination, have the financial strength (taking into account all of the proposed transferee’s other obligations and liabilities) to perform its obligations with respect to the proposed transfer,
Supermicro–4701 Santa Fe service order MCSA-001 (21 MW, Vernon), section 13 · Supermicro 8-K, Exhibit 10.2

On the deal pages

Financings by the parties to these contracts

The latest debt raised by the companies that signed them, with the terms and the sources on each deal page.

FinancingBorrower or issuerDateAmount
Investment-grade fixed-rate DDTLLambda1 October 2026US$1.01bn
Pre-IPO convertible loan-note subscription (initial minimum)Nscale15 September 2026US$2.1bn
Dell short-term equipment lease payment schedules (aggregate)Nscale4 September 2026US$2.54bn
North Carolina GPU DDTLNscale31 August 2026US$1.2bn
Ward County GPU DDTLNscale31 August 2026US$1.85bn

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Method

Each extract is quoted from the contract as filed with the SEC, checked against the filed text when it was added; “…” marks words left out. Filers redact commercial terms, so a [***] or [*] is the filer's, not ours. The summaries describe the wording, not how a court would read it, and each contract's defined terms and other clauses can change the effect. General information drawn from public filings. It is not legal advice on any transaction, and using this page does not create a lawyer-client relationship. Views are personal.

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