Hyperscale Data Enters into an Agreement for up to $50 Million in New Equity Financing to Accelerate Buildout of Artificial Intelligence Data Center in Michigan
Rhea-AI Summary
Hyperscale Data (NYSE: GPUS) has secured up to $50 million in new equity financing through an agreement with an unaffiliated institutional investor. The deal involves the purchase of up to 50,000 shares of Series B Convertible Preferred Stock through monthly closings of minimum $1 million each.
The capital will accelerate the construction of the company's Michigan data center, which is being developed as a hyperscale-ready campus targeting enterprise, artificial intelligence (AI), and high-performance computing cloud providers. The facility will feature advanced cooling technologies, robust power infrastructure, and focus on sustainable operations.
The expansion of power capacity at the Michigan facility will commence in the coming months, with regular stockholder updates planned on the buildout progress.
Positive
- Secured significant funding of up to $50 million for data center expansion
- Monthly minimum funding guarantee of $1 million
- Strategic expansion into high-demand AI and HPC infrastructure market
- Development of sustainable and energy-efficient data center infrastructure
Negative
- Potential dilution for existing shareholders through convertible preferred stock issuance
- Monthly funding subject to certain conditions
- Securities being issued through private placement, limiting trading flexibility
Insights
Hyperscale Data's
The structured financing approach—with mandatory monthly minimums of
While the conversion terms of the preferred stock aren't disclosed (forthcoming in an 8-K filing), significant dilution is inevitable given the funding-to-market-cap ratio. However, for microcap companies pursuing capital-intensive growth opportunities, securing substantial committed capital is typically the primary hurdle, even at the cost of dilution.
The strategic focus on high-density AI and HPC workloads positions GPUS in a high-growth infrastructure segment with persistent capacity constraints. The Michigan data center's emphasis on advanced cooling technologies and robust power infrastructure addresses critical requirements for next-generation computing.
For investors, while near-term dilution presents a challenge, the company now has runway to execute its data center strategy in a capital-intensive sector where barriers to entry are substantial. This institutional backing fundamentally transforms GPUS's execution capabilities in the hyperscale data center market.
The
The emphasis on "hyperscale-ready" architecture with advanced cooling technologies indicates proper technical positioning. Modern AI workloads generate extraordinary heat density—often exceeding 25-50kW per rack—requiring sophisticated cooling solutions beyond traditional data center designs. This positions the facility for high-value tenancy.
Michigan provides strategic advantages for AI infrastructure: favorable climate for cooling efficiency, relatively low electricity costs, and reduced natural disaster risk compared to coastal locations. The location balances proximity to major Midwest markets while avoiding the premium costs and capacity constraints of tier-1 data center hubs.
The focus on sustainability aligns with hyperscale customer requirements, as major AI providers face increasing scrutiny over computational carbon footprints. Energy efficiency in cooling and power infrastructure directly impacts operational margins in data center economics.
This financing transforms Hyperscale Data from concept to credible market participant in the hyperscale AI infrastructure landscape. The company has correctly identified the highest-growth, highest-margin segment of the data center market—AI and HPC workloads—where demand substantially outpaces current supply, creating premium pricing opportunities for properly designed facilities.
LAS VEGAS, April 01, 2025 (GLOBE NEWSWIRE) -- Hyperscale Data, Inc. (NYSE American: GPUS), a diversified holding company (“Hyperscale Data” or the “Company”), today announced it has entered into an agreement for up to
“The Preferred Transaction represents a strong endorsement of our vision and business model,” stated William B. Horne, Chief Executive Officer of Hyperscale Data. “With this infusion of capital, we will be well-positioned to advance construction of our Michigan data center and expand capacity to meet the accelerating demand for scalable, energy-efficient data center infrastructure.”
The Company’s Michigan data center is being developed as a hyperscale-ready campus designed to serve enterprise, artificial intelligence (“AI”), and high-performance computing (“HPC”) cloud providers with high-density workloads. The facility will feature advanced cooling technologies, robust power infrastructure, and a commitment to sustainable and efficient operations.
“We are building for the future—laying the groundwork for digital infrastructure that is resilient, efficient, and future-proof,” added Milton “Todd” Ault III, Executive Chairman of Hyperscale Data. “The Preferred Transaction allows us to execute on that vision at speed and scale, while also contributing to economic development and job creation in the local community. The expansion of the overall power capacity at our Michigan data center will begin in the coming months and we will update stockholders as the buildout progresses.”
The Preferred Transaction will be conducted through a series of monthly closings with the Investor being obligated to fund a minimum of
The preferred shares described above are being issued in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder and, along with the shares of common stock underlying the preferred shares, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the preferred shares and the underlying shares of common stock issuable upon conversion of the preferred shares may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of shares of the Company’s common stock in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other 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.
Through its wholly owned subsidiaries, Hyperscale Data owns and operates a data center at which it mines digital assets and offers colocation and hosting services for the emerging AI ecosystems and other industries. Hyperscale Data’s subsidiary, Ault Capital Group, Inc. (“ACG”), is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact.
Hyperscale Data intends to completely divest itself of ACG on or about December 31, 2025, at which time, it would solely be an owner and operator of data centers to support HPC services. Until that happens, the Company provides, 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, social gaming platform, equipment rental services, defense/aerospace, industrial, automotive, medical/biopharma and hotel operations. In addition, ACG 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 190 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 hyperscaledata.com.
Hyperscale Data Investor Contact:
IR@hyperscaledata.com or 1-888-753-2235
FAQ
What is the value of Hyperscale Data's (GPUS) new equity financing agreement?
How will GPUS receive the $50 million funding for its Michigan data center?
What is the purpose of Hyperscale Data's Michigan data center expansion?
When will GPUS begin expanding the power capacity at its Michigan data center?
What type of stock is being issued in GPUS's new financing agreement?
