Hyperscale Data Reduces Debt by $25 Million, Strengthening Capital Structure and Bolstering Financial Flexibility Ahead of Michigan AI Data Center Expansion

Rhea-AI Summary

Hyperscale Data (NYSE American: GPUS) has announced a significant $25 million reduction in non-affiliated debt year-to-date, strengthening its capital structure. This strategic move enhances the company's financial flexibility as it develops its flagship AI data center in Michigan through its subsidiary, Alliance Cloud Services.

The Michigan facility, spanning 617,000 square feet, is set for power capacity expansion to 70 megawatts (MW) over the next 20 months through new natural gas infrastructure. The company anticipates ultimately reaching 340 MW capacity, pending utility provider agreements and funding. The improved balance sheet positions Hyperscale Data to better execute key initiatives including power expansion, component procurement, and hyperscale customer onboarding.

Positive

• Significant debt reduction of $25 million strengthens balance sheet
• Plans to expand Michigan data center power capacity to 70 MW in 20 months
• Potential for 340 MW total power capacity at Michigan facility
• Enhanced ability to access growth capital on more favorable terms
• 617,000-square-foot data center campus positions company for AI infrastructure growth

Negative

• Power capacity expansion contingent on utility provider agreement
• Additional funding required for full power capacity development
• Extended timeline of 20 months for initial power capacity increase

Insights

Financial Analyst

Hyperscale Data's $25M debt reduction strengthens its financial position for AI data center expansion, improving capital structure and growth potential.

Hyperscale Data's $25 million debt reduction represents a significant financial milestone that materially improves the company's capital structure. This debt reduction was executed through a combination of repayments and strategic conversions, which has lowered leverage, improved liquidity ratios, and enhanced their ability to access growth capital on more favorable terms. These improvements are critical as the company positions itself in the capital-intensive AI infrastructure space.

The strengthened balance sheet comes at a strategic time as the company prepares for significant expansion of its Michigan data center. The planned power capacity increase to 70 MW over the next 20 months through natural gas distribution infrastructure will require substantial capital investment. The longer-term goal of reaching 340 MW capacity further underscores the need for financial flexibility.

This debt reduction creates a virtuous cycle for Hyperscale Data: improved financial metrics will likely lower their cost of capital, enabling more efficient funding of infrastructure investments, which in turn could accelerate revenue generation from enterprise and hyperscale AI customers. By deleveraging ahead of major capital expenditures, the company is taking a prudent approach to balance sheet management, potentially avoiding dilutive financing later.

The timing aligns with growing demand for AI computing infrastructure, allowing Hyperscale Data to position itself for partnerships and customer acquisition with a more solid financial foundation. This improved capital structure will be particularly valuable if they need to raise additional funds to support the complete buildout of the 617,000-square-foot data center campus to its full potential capacity.

LAS VEGAS, Aug. 8, 2025 /PRNewswire/ -- Hyperscale Data, Inc. (NYSE American: GPUS), a diversified holding company ("Hyperscale Data" or the "Company"), today announced it has reduced its outstanding consolidated non-affiliated debt by approximately $25 million year-to-date. This milestone represents a substantial improvement to the Company's capital structure, positioning it for long-term financial strength as it advances development of the flagship artificial intelligence ("AI") data center in Michigan of its indirect wholly owned subsidiary, Alliance Cloud Services, LLC ("ACS").

The $25 million debt reduction, achieved through a combination of repayments and strategic conversions, has meaningfully lowered leverage, improved liquidity ratios and enhanced the Company's ability to access growth capital on more favorable terms. This step supports Hyperscale Data's broader objective to build a financially resilient platform capable of funding large-scale infrastructure development while delivering long-term value to stockholders.

"Reducing our debt by $25 million is not just a milestone, it is a strategic step toward unlocking our full potential to become a leading AI infrastructure company," said Milton "Todd" Ault III, Founder and Executive Chairman of Hyperscale Data. "This significantly stronger balance sheet allows us to move more decisively as we execute on key initiatives, including power expansion, component procurement, and hyperscale customer onboarding."

The debt reduction comes as ACS prepares to incrementally increase the power capacity at its 617,000-square-foot data center campus in Michigan. Once completed, the Michigan facility is expected to serve as a hub for enterprise-grade and hyperscale AI workloads. It is our expectation that we can increase the power capacity to 70 megawatts ("MW") over the next 20 months through new natural gas distribution infrastructure that will enable on-site power generation. Ultimately, we expect that the facility's power capacity will reach approximately 340 MW, subject to the negotiation and execution of an agreement with the local utility provider and securing appropriate funding.

"We are positioning Hyperscale Data to be financially agile and operationally ready," added Ault. "As AI and compute-intensive applications grow exponentially, we believe this debt reduction enables us to attract strategic partners, optimize capital deployment, and scale infrastructure with greater speed and precision."

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, Inc., 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 other wholly owned 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 currently expects the divestiture of ACG (the "Divestiture") to occur in the first quarter of 2026. 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. 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, 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.

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 stockholders 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.

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SOURCE Hyperscale Data Inc.

FAQ

How much debt has Hyperscale Data (GPUS) reduced in 2025?

Hyperscale Data has reduced its outstanding consolidated non-affiliated debt by $25 million year-to-date through a combination of repayments and strategic conversions.

What is the planned power capacity for Hyperscale Data's Michigan AI data center?

The company plans to increase power capacity to 70 megawatts over the next 20 months, with an ultimate target of 340 megawatts, subject to utility provider agreements and funding.

How large is Hyperscale Data's Michigan data center facility?

The Michigan data center campus spans 617,000 square feet and is being developed as a hub for enterprise-grade and hyperscale AI workloads.

What is Hyperscale Data's strategy for power expansion at the Michigan facility?

The company plans to implement new natural gas distribution infrastructure for on-site power generation, aiming to reach 70 MW capacity in 20 months, with potential expansion to 340 MW pending agreements and funding.

How will the debt reduction benefit Hyperscale Data's operations?

The debt reduction improves liquidity ratios, enhances access to growth capital on better terms, and enables the company to move more decisively on key initiatives including power expansion, component procurement, and customer onboarding.