Duos Edge AI, Inc., a subsidiary of Duos Technologies Group, Inc. (NASDAQ: DUOT), has executed a non-binding term sheet with 0Lat LLC outlining a proposed structured lease for its entire portfolio of edge data center sites. The agreement covers all 15 facilities located across Texas and Georgia, representing an aggregate capacity of 225 cabinets.

The transaction is designed to support the growth of Zero Latency's distributed compute operations. Subject to the completion of due diligence and site-level readiness, the Duos Edge AI portfolio is expected to provide backbone capacity for Zerogrid, Zero Latency's distributed inference network. This network serves telecom, fiber, physical AI, and enterprise customers. Although this marks the first formal transaction between the parties, their teams have previously collaborated on edge data center activities and intend to extend this cooperation across the edge AI segment.

Transaction Structure

Under the terms of the sheet, both parties have entered a 90-day mutual exclusivity period. During this window, they will complete confirmatory due diligence, which includes site-level verification of the invested capital across the portfolio. The teams will also work to finalize the structure, pricing, and payment terms for a definitive transaction.

The parties intend for any definitive agreement to be structured as a true lease for accounting, tax, and financing purposes.

Strategic Context

The proposed lease aligns with Zero Latency's expansion into distributed inference networks. By securing the entire Duos Edge AI portfolio, Zero Latency aims to consolidate backbone capacity for its Zerogrid platform. The prior collaboration between the two entities suggests a foundation for integrating these physical assets into Zero Latency's broader service offerings for enterprise and telecom clients.

Duos Technologies Group, Inc. (NASDAQ: DUOT) completed the sale of its wholly owned rail technology subsidiary, Duos Technologies, Inc., to Sandbank Acosta, LLC on August 5, 2026. The transaction, effective as of June 30, 2026, marks a strategic pivot for the Jacksonville-based firm, allowing it to concentrate capital and management attention on scaling its Edge Data Center and AI infrastructure platforms through subsidiaries Duos Edge AI, Inc. and Duos Technology Solutions, Inc.

The divestiture returns the original operating business of Duos to private ownership under the brand DuosTI. The deal was reviewed and approved by the Board of Directors as a related-party transaction, given that Adrian Goldfarb, Duos’ interim Chief Financial Officer, holds a 50% membership interest in the buyer, Sandbank Acosta, LLC. An independent fairness opinion process supported the transaction during the second quarter of 2026.

Leadership Transition

Javier Acosta has been appointed President of DuosTI, succeeding Goldfarb, who stepped down from the role he held since March 2026 to oversee the divestiture. Acosta previously led the commercialization and field deployment of the Railcar Inspection Portal across North America.

"DTI built the technology that put Duos on the map, and its Railcar Inspection Portals remain the standard for AI-driven train inspection in North America," said Doug Recker, Chief Executive Officer of Duos Technologies Group. "This transaction completes the strategic repositioning we announced earlier this year... allowing Duos to dedicate its full capital and management attention to scaling our Edge Data Center and AI infrastructure platforms."

Business Operations

DuosTI operates as an independent, privately held company focused on railroad technology. It maintains the largest installed base of Railcar Inspection Portals (RIP®) in North America, serving major carriers in the United States, Canada, and Mexico. The company holds an extensive patent portfolio covering wayside scanning and AI defect detection, along with what it describes as the largest image database of railcar components globally.

Duos Technologies Group will provide certain transition services to DuosTI following the closing to ensure continuity for customers and employees. The move finalizes the strategic repositioning announced by Duos in March 2026.

What the Numbers Show

The transaction represents a complete exit from the rail inspection sector for Duos Technologies Group, shifting its revenue profile entirely toward data center infrastructure. While no financial value for the sale was disclosed, the strategic implication is a consolidation of resources. By divesting the mature rail business, Duos aims to accelerate growth in the high-demand Edge Data Center market, addressing distributed digital infrastructure needs without the operational complexity of maintaining two distinct industrial verticals.