STOCK TITAN

Hyperscale Data Issues Business Update to Stockholders

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Positive)
Tags

Hyperscale Data (NYSE: GPUS) issued a stockholder update focusing on its strategic shift to data center operations. The company is transforming its Michigan data center, a 617,000 square foot facility on 34.5 acres, from a current 30MW capacity to potentially 300MW. The company is in discussions with utilities and developers for infrastructure upgrades to support high-performance computing (HPC) and AI solutions.

The development project could cost up to $2 billion at the high end. The company plans to distribute a one-time dividend of Series F Exchangeable Preferred Stock to separate non-core businesses under Ault Capital Group, making Hyperscale Data a pure-play data center operator. The company aims to secure long-term leases with well-capitalized hyperscalers, targeting agreements similar to Core Scientific's recent 12-year, $3.5 billion contract for 200MW.

Hyperscale Data (NYSE: GPUS) ha rilasciato un aggiornamento per gli azionisti focalizzandosi sulla sua transizione verso operazioni di data center. L'azienda sta trasformando il suo data center in Michigan, una struttura di 617.000 piedi quadrati su 34,5 acri, da una capacità attuale di 30MW a una potenziale capacità di 300MW. L'azienda è in trattative con servizi pubblici e sviluppatori per aggiornamenti dell'infrastruttura al fine di supportare soluzioni di calcolo ad alte prestazioni (HPC) e intelligenza artificiale (AI).

Il progetto di sviluppo potrebbe costare fino a 2 miliardi di dollari al massimo. L'azienda prevede di distribuire un dividendo una tantum di azioni privilegiate convertibili di Serie F per separare le attività non core sotto Ault Capital Group, rendendo Hyperscale Data un operatore puro di data center. L'azienda punta a garantire contratti di locazione a lungo termine con hyperscalers ben capitalizzati, mirati a accordi simili al recente contratto di 12 anni e 3,5 miliardi di dollari di Core Scientific per 200MW.

Hyperscale Data (NYSE: GPUS) emitió una actualización para los accionistas centrada en su cambio estratégico hacia las operaciones de centros de datos. La empresa está transformando su centro de datos en Michigan, una instalación de 617,000 pies cuadrados en 34.5 acres, de una capacidad actual de 30MW a una capacidad potencial de 300MW. La empresa está en conversaciones con servicios públicos y desarrolladores para mejoras de infraestructura para apoyar soluciones de computación de alto rendimiento (HPC) y AI.

El proyecto de desarrollo podría costar hasta 2 mil millones de dólares en el extremo superior. La empresa planea distribuir un dividendo único de acciones preferentes canjeables de la Serie F para separar negocios no centrales bajo Ault Capital Group, convirtiendo a Hyperscale Data en un operador puro de centros de datos. La empresa busca asegurar arrendamientos a largo plazo con hyperscalers bien capitalizados, dirigidos a acuerdos similares al reciente contrato de 12 años y 3.5 mil millones de dólares de Core Scientific por 200MW.

하이퍼스케일 데이터 (NYSE: GPUS)는 데이터 센터 운영으로의 전략적 전환에 초점을 맞춘 주주 업데이트를 발표했습니다. 이 회사는 34.5에이커의 부지에 있는 617,000 평방피트의 미시간 데이터 센터를 현재 30MW의 용량에서 잠재적으로 300MW로 전환하고 있습니다. 이 회사는 고성능 컴퓨팅(HPC) 및 AI 솔루션을 지원하기 위한 인프라 업그레이드를 위해 유틸리티 및 개발자와 논의 중에 있습니다.

개발 프로젝트는 최대 20억 달러가 소요될 수 있습니다. 이 회사는 Ault Capital Group 하의 비핵심 비즈니스를 분리하기 위해 일회성 시리즈 F 교환 가능 우선주 배당금을 분배할 계획으로, 하이퍼스케일 데이터를 순수 데이터 센터 운영업체로 만들고 있습니다. 이 회사는 고자본의 하이퍼스케일러와 장기 임대 계약을 확보하는 것을 목표로 하며, Core Scientific의 최근 12년, 35억 달러 계약과 유사한 계약을 목표로 하고 있습니다.

Hyperscale Data (NYSE: GPUS) a publié une mise à jour pour les actionnaires mettant l'accent sur son changement stratégique vers les opérations de centres de données. L'entreprise transforme son centre de données du Michigan, une installation de 617 000 pieds carrés sur 34,5 acres, d'une capacité actuelle de 30MW à une capacité potentielle de 300MW. L'entreprise est en pourparlers avec des services publics et des développeurs pour des mises à niveau d'infrastructure afin de soutenir les solutions de calcul haute performance (HPC) et d'IA.

Le projet de développement pourrait coûter jusqu'à 2 milliards de dollars au maximum. L'entreprise prévoit de distribuer un dividende exceptionnel d'actions privilégiées échangeables de série F pour séparer les activités non essentielles sous Ault Capital Group, faisant de Hyperscale Data un opérateur pur de centres de données. L'entreprise vise à sécuriser des baux de longue durée avec des hyperscalaires bien capitalisés, visant des accords similaires au récent contrat de 12 ans et 3,5 milliards de dollars de Core Scientific pour 200MW.

Hyperscale Data (NYSE: GPUS) hat ein Update für die Aktionäre veröffentlicht, das sich auf seinen strategischen Wandel zu Rechenzentrumsbetrieben konzentriert. Das Unternehmen transformiert sein Rechenzentrum in Michigan, eine 617.000 Quadratfuß große Einrichtung auf 34,5 Acres, von einer aktuellen Kapazität von 30MW zu einer potenziellen Kapazität von 300MW. Das Unternehmen führt Gespräche mit Versorgungsunternehmen und Entwicklern über Infrastrukturverbesserungen zur Unterstützung von Hochleistungsrechnen (HPC) und KI-Lösungen.

Das Entwicklungsprojekt könnte bis zu 2 Milliarden USD kosten. Das Unternehmen plant die Verteilung einer einmaligen Dividende in Form von Series-F-Tauschpreferenzaktien zur Trennung von Non-Core-Geschäften unter Ault Capital Group, wodurch Hyperscale Data zu einem reinen Anbieter von Rechenzentrumsdienstleistungen wird. Das Unternehmen hat das Ziel, langfristige Mietverträge mit gut kapitalisierten Hyperscalern abzuschließen, die ähnlich wie Core Scientifics kürzlicher 12-Jahres-Vertrag über 3,5 Milliarden USD für 200MW aussehen.

Positive
  • Potential power capacity expansion from 30MW to 300MW
  • Strategic transformation into pure-play data center operator
  • Comparable industry deals suggest potential revenue of $3.5B over 12 years for similar capacity
  • Facility already increased from 1.5MW to 30MW since acquisition
Negative
  • Project requires massive capital investment up to $2B
  • No binding agreements or term sheets secured yet
  • Development subject to pending state regulatory approvals
  • Faces significant competition and execution risks

Insights

The business update reveals significant strategic developments at Hyperscale Data. The company is pivoting to become a pure-play data center operator, with plans to potentially develop up to 300 MW of power capacity at its Michigan facility. The scale of investment required ($2 billion) and ongoing negotiations with a national real estate developer signal a major transformation. Drawing parallels to Core Scientific's recent deal generating $3.5 billion in revenue over 12 years for 200 MW, Hyperscale Data's facility could command similar economics. However, key risks include securing necessary funding, regulatory approvals and credit-worthy customers. The upcoming separation of non-core businesses through the Series F Preferred Stock dividend will streamline operations but execution remains crucial.

The Michigan data center's transformation from 1.5 MW to 30 MW, with potential expansion to 300 MW, represents a strategic positioning in the high-performance computing (HPC) and AI infrastructure space. The facility's Tier III guidance compliance, robust security measures and multi-carrier routing demonstrate technical sophistication. The estimated cost of $5-10 million per MW for critical load infrastructure aligns with industry standards for AI-focused data centers. The timing is particularly advantageous as data center energy demand is projected to double by 2030, driven primarily by AI workloads. The 617,000 square foot facility on 34.5 acres provides ample space for this ambitious expansion.

Company in Negotiations to Develop and Lease its Michigan Data Center in a Significant Transaction

LAS VEGAS, Dec. 09, 2024 (GLOBE NEWSWIRE) -- Hyperscale Data, Inc. (NYSE American: GPUS), a diversified holding company (“Hyperscale Data,” or the “Company”), today issued a letter from its Chief Executive Officer to its valued stockholders.

Dear Stockholders,

As Chief Executive Officer of the Company, I wish to share the latest updates and insights into the Company’s strategic direction.

Hyperscale Data has achieved many milestones during 2024, and we believe those achievements will drive long term growth and shareholder value. In September of this year, we changed our name to Hyperscale Data and alerted the market of our intention to focus on the development of our Michigan data center (the “Data Center”). This is a strategic departure from our historical operations in which we focused on multiple industries as a diversified holding company. However, by year-end, we will have completed a one-time dividend of Series F Exchangeable Preferred Stock (the “Preferred Stock”) to all common stockholders and holders of our Series C Convertible Preferred Stock (the “Dividend”). The Dividend is important because our stockholders retain ownership of valuable businesses as we separate our non-core businesses held by Ault Capital Group, Inc. (“ACG”) from our data center business.

The Dividend was structured to provide holders of the Preferred Stock with an efficient means to exchange their shares into common stock of ACG. ACG is a wholly owned subsidiary of Hyperscale Data whose subsidiaries presently comprise all of Hyperscale Data’s subsidiaries, other than those entities that own or operate our Data Center. Specifically, the ACG entities, among other businesses, include our crane rental business, lending business, and hotel and real estate business. The completion of this dividend and the subsequent exchange into common stock of ACG, which we expect will be substantially completed by December 2025, is central to our corporate reorganization because Hyperscale Data will become a pure play organization focused solely on data center operations, and better situated to fully develop the Data Center.

The Data Center, a 617,000 square foot facility located on a 34.5-acre site, was acquired in January 2021 by our wholly owned subsidiary, Alliance Cloud Services, LLC. Since we acquired the Data Center, we have increased the power load from 1.5 megawatts (“MW”) to approximately 30 MW and the utility company that serves the Data Center has indicated that it has the ability to expand the capacity up to approximately 300 MW. Initial development included establishing an approximate 100,000 square foot section of the building following Uptime Institute’s Tier III guidance for primary electrical systems, a focus on physical security utilizing various surveillance techniques, multi-layered access and 24x7 onsite manned operations, and implementing multi-carrier geographically diverse routing for network connectivity.

We are currently in discussions with the utility and a top tier national real estate developer to both expand the power load of the Data Center and develop a plan for infrastructure upgrades necessary to support the growing demands of high-performance computing (“HPC”) services powering Artificial Intelligence (“AI”) solutions. This will be a multi-year project that could cost between $5 million and $10 million per MW of critical load required to support the operations of mission critical data center equipment, which we estimate would be around 200 MW, assuming a total power load of 300 MW, which includes power for support infrastructure and non-critical administrative systems. At the high end of our range, a build out project of this scale could cost $2 billion and likely require us to partner with a top-tier real estate developer and well capitalized customers to justify an investment of this magnitude. We believe the scarcity of available power presents a significant opportunity for the data center business. We are encouraged by our current discussions with potential partners, and we expect to execute a non-binding term sheet with a nationally recognized commercial real estate company for development of the Data Center and we ultimately expect to host HPC services for a well-capitalized hyperscaler.

Bolstered by rapid advancements and demand for next generation technologies that power large-language models, such as ChatGPT, the energy demand from data centers is expected to nearly double by 2030 and AI will be the largest driver. Importantly, we are at the inception phase of this AI movement, much like the Internet during the 1990’s. In 1990, few recognized the opportunity that the Internet would provide to small companies to capitalize on online commerce, personalization and the capacity to expand knowledge. Yet, by 1999, we had witnessed small companies overcome large, entrenched companies because they were more adaptive and able to leverage the Internet in such a way as to create new customer experiences and forge long-term relationships.

We intend to emulate this proven strategy and focus on long-term relationships and a market leadership position. Given the amount of capital necessary for our development plans and the long-term nature of the hosting arrangements we expect to consummate, we will primarily pursue relationships with well capitalized companies and in that regard, we are currently in discussions to lease the data center under long-term leases, with our emphasis initially on the existing 30 MW. Once we have consummated leases for the existing power capacity, we will turn to the entire expected available capacity of 300 MW.

Stockholders can review comparable transactions, such as the contract that Core Scientific, Inc. announced in June of this year, for more information on what potential contracts will mean for Hyperscale Data. The long-term hosting agreement announced by Core Scientific is expected to generate total aggregate revenue of more than $3.5 billion during the initial 12-year contract term on approximately 200 MW of critical power to host HPC services. We are seeking to enter into similar agreements and expect these agreements would result in significant revenue increases over the next 8-12 years. We are excited about replicating such success with our Michigan facility, which we believe will house a major hyperscaler customer in the foreseeable future. Inquiries for our Michigan facility span top-tier companies looking to establish long-term leases, leveraging the site’s potential to support AI advancements.

Our strategy is not without risk, it requires significant investment and the ability to attract well capitalized companies to partner with us. Currently, we have not yet entered into a non-binding term sheet for the development of the Data Center. Further, if our discussions result in the execution of a non-binding term sheet, consummation of a transaction would still be subject to execution of definitive documents, customary due diligence and approvals of the parties, which may not occur. Our development of the Data Center will also be subject to the Company’s receipt of state regulatory approvals, which it may or may not obtain. Lastly, our success will ultimately reside in our ability to attract a credit-worthy customer to contract for our HPC services, assuming we successfully develop the Data Center as we plan. While we are optimistic, we recognize these are significant challenges. During 2025, we will face well-funded competition, development challenges and the risk of execution. However, the HPC data center market should prove to be a very large market capable of supporting a number of companies and we believe that Hyperscale Data will be one of the companies that benefit. I am optimistic about the future and remain committed to maximizing stockholder value. We appreciate your continued support as we forge ahead in this promising landscape.

Thank you for your steadfast trust and commitment to our shared future.

Regards,

William B. Horne, Chief Executive Officer

For more information on Hyperscale Data and its subsidiaries, Hyperscale Data recommends that stockholders, investors, and any other interested parties read Hyperscale Data’s public filings and press releases available under the Investor Relations section at https://hyperscaledata.com/ or available at www.sec.gov.

About Hyperscale Data, Inc.

Hyperscale Data is transitioning from a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact to becoming solely an owner and operator of data centers to support high performance computing services. Through its wholly and majority-owned subsidiaries and strategic investments, Hyperscale Data owns and operates a data center at which it mines Bitcoin and offers colocation and hosting services for the emerging artificial intelligence ecosystems and other industries. It also provides, through its wholly owned subsidiary, Ault Capital Group, Inc., mission-critical products that support a diverse range of industries, including a social gaming platform, equipment rental services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. In addition, Hyperscale Data is actively engaged in private credit and structured finance through a licensed lending subsidiary. Hyperscale Data’s headquarters are located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties.

Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors. More information, including potential risk factors, that could affect the Company’s business and financial results are included in the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, the Company’s Forms 10-K, 10-Q and 8- K. All filings are available at www.sec.gov and on the Company’s website at www.hyperscaledata.com.

Hyperscale Data Investor Contact:
IR@hyperscaledata.com or 1-888-753-2235


FAQ

What is the potential power capacity of Hyperscale Data's (GPUS) Michigan data center?

The Michigan data center has potential to expand from current 30MW to approximately 300MW total capacity, according to utility company assessments.

How much could Hyperscale Data's (GPUS) Michigan data center development cost?

The development project could cost between $5-10 million per MW, potentially reaching up to $2 billion for the full 300MW capacity build-out.

What is Hyperscale Data's (GPUS) dividend plan for stockholders?

The company plans to distribute a one-time dividend of Series F Exchangeable Preferred Stock to separate non-core businesses under Ault Capital Group by year-end.

What are the main risks for Hyperscale Data's (GPUS) data center project?

Key risks include securing significant capital investment, obtaining state regulatory approvals, attracting credit-worthy customers, and facing well-funded competition.

Hyperscale Data, Inc.

NYSE:GPUS

GPUS Rankings

GPUS Latest News

GPUS Stock Data

5.77M
1.10M
0.13%
1.47%
1.96%
Aerospace & Defense
Electronic Components, Nec
Link
United States of America
LAS VEGAS