Hyperscale Data Subsidiary Alliance Cloud Services Enters Agreement with Local Utility Provider to Advance Natural Gas Infrastructure for Michigan Data Center
Rhea-AI Summary
Hyperscale Data (NYSE American: GPUS) announced that its subsidiary Alliance Cloud Services (ACS) has entered into an engineering design agreement with SEMCO Energy Gas Company to develop natural gas infrastructure for its Michigan data center. The project aims to enable 40 megawatts of incremental on-site power generation capacity.
Under the agreement, SEMCO will conduct preliminary engineering and design work for pipeline routing and metering infrastructure. The parties plan to negotiate a definitive facility construction agreement in the coming months, with an expected construction completion timeline of 15 months after execution.
Positive
- Planned 40 MW power capacity expansion to support growing AI industry demands
- Strategic partnership with established utility provider SEMCO Energy
- Clear project timeline with 15-month construction completion target
Negative
- Project still requires regulatory approvals
- Final construction agreement yet to be negotiated
- Significant timeline before operational benefits can be realized
Insights
Hyperscale's agreement with SEMCO for 40MW natural gas infrastructure strengthens power capacity for AI workloads at Michigan data center.
Hyperscale Data's subsidiary Alliance Cloud Services has made a strategic move by entering an engineering design agreement with SEMCO Energy to develop natural gas distribution infrastructure. This agreement focuses on enabling 40 megawatts of incremental on-site power generation at their Michigan data center, which represents a significant capacity expansion for AI computing operations.
The agreement outlines a clear development path: beginning with preliminary engineering and design work for pipeline routing and metering infrastructure, followed by a planned facility construction agreement expected within months. The estimated 15-month timeline for construction indicates a relatively quick deployment schedule for energy infrastructure of this scale.
This development is particularly noteworthy in the context of data center power constraints nationwide. By investing in on-site natural gas power generation rather than solely relying on grid capacity, Hyperscale is addressing one of the primary bottlenecks facing AI infrastructure expansion. On-site generation provides several advantages: reduced transmission losses, potentially lower operational costs, and enhanced reliability through diversified power sources.
The 40MW capacity addition is substantial in data center terms – sufficient to power approximately 25,000-30,000 high-performance computing servers or about 400,000 residential homes. For context, a typical enterprise data center might operate at 1-3MW, while hyperscale facilities supporting AI workloads often require 20-100MW. This power expansion positions the Michigan site to potentially host significant
Natural Gas Pipeline Infrastructure to Enable Approximately 40 MW of Incremental Power to Michigan Data Center
Key terms of the Agreement include:
- Scope: SEMCO will conduct all preliminary engineering and design work required for pipeline routing, metering infrastructure, and related equipment to deliver increased natural gas capacity;
- Future Expansion: The parties intend to negotiate a definitive facility construction agreement within the next several months, which would cover construction, installation, and operation of the new infrastructure; and
- Project Timeline: Facility construction, once initiated, is expected to be completed within 15 months from execution of the construction agreement.
"This Agreement marks a key milestone as we expand the infrastructure that powers our Michigan Site," said Will Horne, Chief Executive Officer of Hyperscale Data. "With SEMCO's experience and support, we are laying the foundation for high-efficiency, on-site power generation to meet the growing demands of the artificial intelligence industry."
SEMCO and ACS are committed to working collaboratively to finalize plans and move toward the construction phase later this year, subject to regulatory approvals and the completion of all necessary due diligence.
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 artificial intelligence ("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 to divest itself of ACG (the "Divestiture") on or about December 31, 2025, though there can be no assurance that the Divestiture will be completed during 2025. Upon the occurrence of the Divestiture, the Company would solely be an owner and operator of data centers to support high-performance computing services, though it may at that time continue to operate in the digital asset space as described in the Company's filings with the SEC. 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,
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 Convertible 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
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SOURCE Hyperscale Data Inc.
FAQ
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