Hyperscale Data Engages Northland Capital Markets to Explore Strategic Options for Michigan Data Center
Rhea-AI Summary
Hyperscale Data (NYSE American: GPUS) has engaged Northland Capital Markets to explore strategic alternatives for its Michigan Data Center. Northland brings significant expertise, having advised on over $6 billion of high-performance computing data center transactions in the past year.
The Michigan Facility, situated on 34.5 acres, currently has approximately 30 megawatts of available power. The company has reached an agreement in principle with the local utility to increase power capacity to approximately 300 megawatts. Strategic options under consideration include raising debt or equity for expansion, forming joint ventures, development, monetization, or strategic partnerships.
The power upgrade project faces various risks, including potential failure to execute a definitive agreement, insufficient funding, regulatory hurdles, and challenges in obtaining necessary easements and land rights.
Positive
- Agreement in principle to increase power capacity from 30MW to 300MW
- Partnership with experienced advisor Northland Capital Markets ($6B in recent transactions)
- Substantial facility size of 34.5 acres offering expansion potential
Negative
- Power upgrade project subject to multiple risks including funding uncertainty
- Requires additional regulatory approvals and land rights
- No definitive agreement yet secured for power capacity increase
Insights
The engagement of Northland Capital Markets signals a pivotal moment in Hyperscale Data's strategic evolution. The Michigan Facility's planned power capacity expansion from 30MW to 300MW represents a 10x increase in potential computing capacity, positioning it as a significant player in the high-performance computing (HPC) market.
The strategic value proposition is particularly compelling given two key factors: First, the facility's 34.5-acre footprint provides ample room for physical expansion, a important advantage in an industry where scale drives economics. Second, the preliminary utility agreement for power expansion addresses one of the most critical barriers to entry in data center development - securing reliable, high-capacity power infrastructure.
Northland's recent track record of advising on $6 billion in data center transactions, particularly in transitioning bitcoin mining facilities to HPC operations, is especially relevant. This expertise could be instrumental in positioning the Michigan Facility for the growing demand in AI and machine learning workloads, which require similar power density and cooling infrastructure as crypto mining operations but offer more stable, enterprise-grade revenue streams.
The strategic review process could yield several outcomes:
- Joint venture partnerships with established data center operators seeking rapid market entry
- Sale-leaseback arrangements to unlock capital for expansion while maintaining operational control
- Debt financing leveraging the facility's power agreements and infrastructure assets
- Equity investment from infrastructure funds or strategic investors focused on digital infrastructure
However, investors should note significant execution risks, including the need for substantial capital investment for power infrastructure upgrades, potential regulatory hurdles in securing final power agreements, and the competitive dynamics in the rapidly evolving data center market. The success of this strategic initiative will largely depend on the company's ability to navigate these challenges while capitalizing on the growing demand for high-performance computing infrastructure.
LAS VEGAS, Feb. 24, 2025 (GLOBE NEWSWIRE) -- Hyperscale Data, Inc. (NYSE American: GPUS), a diversified holding company (“Hyperscale Data” or the “Company”), today announced that it has engaged Northland Capital Markets (“Northland”) to assist in evaluating strategic alternatives for its Michigan Data Center (“Michigan Facility”). This engagement underscores the Company’s commitment to unlocking value for stockholders as it explores various pathways, including raising debt or equity for expansion, or forming joint ventures.
Northland brings extensive expertise in the data center sector, having successfully advised on over
William B. Horne, CEO of Hyperscale Data, commented, “We are excited to partner with Northland, a highly respected investment bank with deep industry expertise. We are confident in its ability to help us evaluate and execute the best path forward for our Michigan Facility, which sits on 34.5 acres and currently has approximately 30 megawatts of available power and has reached an agreement in principle with the local utility enabling Alliance Cloud Services, LLC, an indirectly wholly owned subsidiary of the Company, to increase its power capacity to approximately 300 megawatts. As we continue our transition into a pure-play data center business, we are considering all strategic options to maximize stockholder value—whether through development, monetization, or strategic partnerships. We look forward to exploring multiple opportunities that align with our long-term growth strategy.”
Hyperscale Data will provide further updates as the process advances.
The completion of the power upgrade is subject to a number of risks and uncertainties, one or more which could result in the project being terminated, including, but not limited to: failure to agree upon terms and execute a definitive agreement; the inability of the Company to raise sufficient funds to pay for the power upgrades; failure to obtain regulatory consents and approvals; the inability to obtain sufficient easements, rights-of-way and land rights necessary to the work to be performed, and other presently unforeseen events or conditions.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor will there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.
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.
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 digital assets 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 an artificial intelligence software platform, 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
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