Offtake agreements: what makes AI capacity financeable

Offtake is the contracted demand side of a project. It is an agreement under which a buyer commits, in advance and for a defined period, to take the output the project produces or to pay for it whether or not it takes it.

The word comes from commodities and energy, where a mine or a power plant needed a buyer identified before anyone would put capital into building it. The function has not changed. An offtake agreement fixes, in a document, who will pay for what the asset produces, for how long, and on what conditions.

The boundary that matters is the one between an obligation and an expectation. A pipeline, a letter of intent, a memorandum of understanding, a term sheet, a well-attended pilot — each describes demand that is expected to arrive. None of them creates a payment obligation, and the distinction is not a matter of degree. Offtake is a contract or it is a forecast, and the counterparty's reputation does not move it from one category to the other.

A lender sizing debt against a project's expected cash flow needs to know what the asset will be paid, by whom, and until when. A signed commitment can answer those questions, subject to its conditions and the payer's credit.

An asset without contracted revenue can still attract sponsor or development capital. Land, power rights and equipment can have value before a tenant arrives; the capital then bears the risk of finding one. That distinction matters for a parcel with a documented interconnection position but no customer agreement. The site-side test is set out in what makes a data-center site financeable.

Offtake also makes other structuring terms concrete. Project finance may look through to contracted cash flow. A debt service coverage ratio measures cash available against scheduled debt payments. A special-purpose vehicle can hold the asset and its associated payment rights together.

Because an AI data center is four assets at one address, it has four offtake questions rather than one. The output being sold differs by layer, and so does the name on the document — but the function is identical in each case.

A quoted capacity number does not tell you when cash starts or what portion is fixed. Read a capacity deal in this order: the unit sold, the committed quantity, the payment floor, the commencement test, then the items that can change the net receipt. The table shows common contract shapes, not published market prices or a standard term sheet.

A filed 2026 Digi Power X–Cerebras colocation agreement provides one facility example: each phase's recurring fee begins at ready-for-service, contracted IT load is take-or-pay, and energy pass-throughs and service credits are treated separately. (Digi Power X / Cerebras colocation agreement, SEC filing, as of October 19, 2026) IREN's annual report describes a different layer: reserved compute contracts specify capacity, service levels, pricing, term and acceptance, with revenue other than prepayments generally starting after delivery, commissioning and required acceptance. (IREN FY2026 Form 10-K, as of October 19, 2026) These examples show why a facility's MW commitment and a compute provider's GPU-capacity commitment cannot be compared by headline contract value alone.

For the clause-by-clause facility view, see the hosting agreement as a financeable contract. For the customer-payment and acceptance test on a compute deal, see compute offtake as credit.

Signed is not the same as bankable. Five characteristics decide how much weight a contract will actually carry.

• Firmness. Whether the buyer owes payment or merely holds a right to consume. An obligation to pay whether or not the output is taken is credit; a right to buy at agreed prices is a sales channel. That distinction is worked through at take-or-pay, and tested against a live contract at offtake agreement as credit.
• Tenor. How long the obligation runs, measured against the capital behind the asset rather than in the abstract. A contract shorter than the money leaves a tail somebody carries — see tenor.
• The counterparty, and what stands behind it. The contract is worth what the payer can pay under stress. Where the payer's own credit does not carry it, the gap is usually closed with credit support such as a letter of credit or a parent guarantee.
• Conditionality. What has to be true before payment is owed: availability and performance tests, conditions precedent, curtailment, force majeure, termination rights. A firm-looking obligation with a broad termination-for-convenience right is a notice period, not a term.
• Assignability. Whether the contract can be assigned or charged to the parties financing the asset, and whether the buyer will acknowledge that directly. A contract the capital behind the project cannot reach is doing less work than it appears to.

When those five are established, the contract is an input to structure rather than a hope attached to one. Continuum works the layers separately: establishing what each one sells and to whom, and structuring the deal so each layer is arranged against the offtake that genuinely supports it.