Executed MSA Provides for Initial 20 MW Deployment with Potential Expansion to 52 MW
, /PRNewswire/ — Hyperscale Data, Inc. (NYSE American: GPUS), an artificial intelligence (“AI“) data center company anchored by Bitcoin (“Hyperscale Data” or the “Company“), today announced that management has established $750 million as the minimum valuation at which it presently believes a sale of the Company’s Michigan AI data center campus (the “Michigan Campus“) would merit serious consideration.
Management currently estimates that the Michigan Campus could support a valuation ranging from approximately $750 million to $1.25 billion. This assessment reflects the economics of the executed master services agreement (the “MSA“), the campus’s existing infrastructure and access to power, its expansion potential and relevant public-market valuations within the AI infrastructure industry.
The Company continues to evaluate alternatives intended to maximize stockholder value, including a potential sale of the Michigan Campus, an initial public offering (“IPO“) of Sentinum, Inc. (“Sentinum“), a wholly owned subsidiary of the Company and the sole owner of Alliance Cloud Services, LLC (“ACS“), in which a minority position in Sentinum is sold to fund expansion of the facility, or continued ownership and development of the business. No definitive decision has been made regarding any potential transaction.
Michigan Campus Contract and Expansion Potential
ACS recently entered into the MSA with a California-based neocloud provider (the “Customer“) for the deployment of an initial 20 megawatts (“MW“) of critical AI compute capacity at the Michigan Campus. The MSA has an initial term of 10 years and includes two five-year extension options that may be exercised by the Customer. If the Customer exercises both extension options, the initial 20 MW deployment is expected to generate more than $1.2 billion in aggregate revenue over the maximum 20-year term.
The MSA also provides the Customer with a right to an additional 32 MW of critical AI compute capacity. If the Customer exercises that right within the first two years of the initial term and the additional capacity continues through both extension terms, the MSA is expected to generate more than $3.0 billion in total contract revenue from the potential 52 MW deployment.
The Company has previously announced that it believes the Michigan Campus could ultimately support more than 300 MW of total power capacity. The development of any capacity beyond the initial 20 MW covered by the MSA is subject to financing, regulatory approvals, engineering, utility agreements, infrastructure availability, customer demand and other conditions. There can be no assurance that additional capacity will be developed, financed, contracted or placed into service.
Management Perspective
Milton “Todd” Ault III, Executive Chairman of Hyperscale Data and, through Ault & Company, Inc. and its affiliates, the Company’s largest stockholder, stated, “Over more than three decades as an investor, I have seen markets fail to reflect fundamental value that is already present in a business or asset. I believe the Michigan Campus is such a case. The Company’s current market valuation does not, in my view, reflect the value of the campus, the opportunity created by our long-term customer relationship or the strategic importance of its power and infrastructure.
“As the Company’s largest stockholder, I care deeply about the outcome. We will not rush into a transaction simply for the sake of completing one, and we will evaluate the Michigan Campus based on its underlying fundamentals and long-term potential, not solely by reference to the Company’s current market valuation. I believe this asset has the potential to reshape Hyperscale Data. We intend to act with discipline and conviction and pursue the outcome that management and the Board of Directors believe will create the greatest long-term value for our stockholders.
“Management believes there is an extraordinary disconnect between the public-market valuation currently being assigned to Hyperscale Data and the fundamental value represented by the Michigan Campus. Investors can examine the executed contract, the power, the expansion opportunity and publicly traded AI infrastructure companies and reach their own conclusions. My conclusion is that this asset alone warrants serious consideration at valuations beginning at $750 million.”
William B. Horne, Chief Executive Officer of Hyperscale Data, said, “We want our stockholders to understand that there are publicly traded companies with assets and business models that provide meaningful comparables to our Michigan AI data center. In our view, those public-market valuations provide important context for the value range we have discussed for the Michigan facility. The disparity between the value we believe is reflected by these comparable companies and the value currently being attributed to Hyperscale Data is substantial.
“We intend to make that disparity clear to the market. If the best way to realize the value of the Michigan facility is through a sale, we are prepared to pursue that path. If the better alternative is to bring the data center business to the public markets as a separate company in which Hyperscale Data retains a controlling interest, we are prepared to pursue that as well. Our objective is straightforward: demonstrate the value we believe we have created in Michigan and pursue the path that we believe will maximize value for Hyperscale Data and its stockholders.”
Valuation and Strategic Review
Management presently believes that $750 million represents the minimum valuation at which an outright sale of the Michigan Campus would merit serious consideration. This threshold is not a ceiling on the potential value of the Michigan Campus. Management’s current valuation range of approximately $750 million to no less than $1.25 billion is based on presently available information and does not constitute or reflect the receipt of an independent appraisal or fairness opinion. Successful execution of the initial AI deployment, additional customer commitments and development of additional power capacity could support a valuation above management’s current range.
The Company continues to evaluate a potential sale of the Michigan Campus, an IPO of Sentinum and continued ownership and development of the Michigan Campus. No definitive decision has been made, and any transaction would be subject to further evaluation and, as applicable, approval by the Company’s Board of Directors. Management does not presently intend to recommend an outright sale at a valuation below $750 million. There can be no assurance that the strategic review will result in a transaction or that any transaction will be completed at $750 million, $1.25 billion or any other valuation.
This press release is not an offer to sell, or a solicitation of an offer to buy, any securities of the Company. Investors should review Hyperscale Data’s filings with the Securities and Exchange Commission before making any investment decision.
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 hyperscaledata.com or available at www.sec.gov.
About Hyperscale Data, Inc.
Through its wholly owned subsidiary Sentinum, Hyperscale Data owns and operates a data center at which it offers colocation and hosting services for the emerging AI ecosystems and other industries. Another of Hyperscale Data’s wholly owned subsidiaries, Ault Capital Group, Inc. (“ACG“), is a hybrid private equity firm and operating company that acquires, finances, builds and actively manages businesses across financial services, digital assets, industrial services, hospitality, defense technologies and other sectors.
Hyperscale Data currently expects the divestiture of ACG (the “Divestiture“) to occur in 2027. Upon the occurrence of the Divestiture, the Company would be an owner and operator of data centers to support high-performance computing services, as well as a holder of the digital assets and the third wholly owned subsidiary of the Company, Omnipresent Robotics, LLC. Until the Divestiture occurs, the Company will continue to provide, through ACG and its wholly and majority-owned subsidiaries and strategic investments, mission-critical products that support a diverse range of industries, including an AI software platform, equipment rental services, defense/aerospace, industrial, automotive and hotel operations. In addition, ACG is actively engaged in private credit and structured finance through Ault Lending, LLC, a licensed lending subsidiary. Hyperscale Data’s headquarters are located at 11411 Southern Highlands Parkway, Suite 190, Las Vegas, NV 89141.
On December 23, 2024, the Company issued one million (1,000,000) shares of a newly designated Series F Exchangeable Preferred Stock (the “Series F Preferred Stock“) to all common stockholders and holders of the Series C Preferred Stock on an as-converted basis. The Divestiture will occur through the voluntary exchange of the Series F Preferred Stock for shares of Class A Common Stock and Class B Common Stock of ACG (collectively, the “ACG Shares“). The Company reminds its stockholders that only those holders of the Series F Preferred Stock who agree to surrender such shares, and do not properly withdraw such surrender, in the exchange offer through which the Divestiture will occur, will be entitled to receive the ACG Shares and consequently be shareholders of ACG upon the occurrence of the Divestiture.
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 hyperscaledata.com.
SOURCE Hyperscale Data Inc.
