Hyperscale Data Subsidiary, Alliance Cloud Services, Signs Multi-Year Agreement in Support of an Artificial Intelligence Implementation Within its Michigan Data Center

Rhea-AI Summary

Hyperscale Data's subsidiary, Alliance Cloud Services, has secured a three-year agreement with a Silicon Valley cloud services provider for its Michigan Data Center. The deal includes seven server cabinets initially, with the option to add five more. Each cabinet will utilize approximately 40 kilowatts of power, with cooling systems capable of handling double that capacity.

While this implementation uses only a small portion of the 100,000 sq.ft. facility and its 28 MW power capacity, it demonstrates the high-density power and cooling solutions needed for modern computing. The company aims to expand its data center operations to 300+ MW of power over the next four years as part of its transition to becoming a pure-play data center company.

Positive

• Secured three-year agreement with Silicon Valley cloud services provider
• Infrastructure demonstrates capability to handle high-density computing requirements
• Strategic expansion plan to reach 300+ MW power capacity in 4 years
• Facility has significant room for growth with 28 MW current capacity

Negative

• Current implementation utilizes only small portion of available capacity
• Significant capital investment likely needed to reach 300+ MW target

Insights

Data Center Infrastructure Analyst

The signing of this three-year agreement marks a strategic expansion in the data center sector, particularly in high-density computing infrastructure. The initial deployment of 7 cabinets at 40kW per cabinet, with potential for 5 more, represents a total power commitment of approximately 280kW, scalable to 480kW. The facility's ability to handle twice the initial power density per cabinet demonstrates forward-thinking infrastructure planning. The company's ambitious goal to scale to 300+ MW of power capacity within four years signals a significant market opportunity in the rapidly growing AI infrastructure space.

For context, a typical enterprise data center cabinet usually operates at 5-10kW, making this deployment's 40kW per cabinet particularly notable for AI workloads. The Michigan location offers strategic advantages in terms of power costs and environmental cooling efficiency. The agreement's structure allows for flexible scaling, which is important for AI infrastructure deployments that often require rapid expansion capabilities.

AI Infrastructure Specialist

This deal represents a significant validation of Hyperscale Data's technical capabilities in supporting advanced AI computing requirements. The high power density specifications of 40kW per cabinet, with cooling systems capable of handling 80kW, align perfectly with the demands of large language model training and inference workloads.

The Silicon Valley cloud provider's choice of Michigan for AI infrastructure deployment suggests a strategic focus on optimizing operating costs while maintaining high-performance capabilities. The facility's 28 MW of available power capacity provides ample headroom for future AI workload expansion. This agreement positions Hyperscale Data favorably in the competitive AI infrastructure market, where power density and cooling efficiency are important differentiators. The transition toward becoming a pure-play data center company could significantly enhance shareholder value, given the premium valuations currently commanded by AI-ready data center operators.

Financial Analyst

This agreement represents a strategic pivot that could substantially impact Hyperscale Data's financial trajectory. While specific revenue figures aren't disclosed, high-density AI computing deployments typically command premium pricing compared to traditional colocation services. Based on current market rates, this initial deployment could generate annual recurring revenue in the $1.5-2.5 million range, with potential upside from the additional cabinet options.

The company's ambitious plan to scale to 300+ MW represents a potential market opportunity of $500+ million in annual revenue at full deployment, assuming industry-standard pricing metrics. For a company with a market cap of $5.6 billion, this transformation into a pure-play data center operator focused on AI infrastructure could lead to multiple expansion, as comparable companies in this space often trade at higher valuations due to the strategic nature of their assets and strong recurring revenue profiles.

LAS VEGAS, Jan. 06, 2025 (GLOBE NEWSWIRE) -- Hyperscale Data, Inc. (NYSE American: GPUS), a diversified holding company (“Hyperscale Data” or the “Company”), today announced that its wholly owned subsidiary, Alliance Cloud Services, LLC (“Alliance Cloud”) has signed a three year agreement, for space, power and connectivity within Alliance Cloud’s Michigan Data Center to a Silicon Valley based cloud services provider. The implementation includes an initial seven (7) server cabinets with capability to add an additional five (5) server cabinets. The server cabinets will start out using approximately 40 kilowatts per cabinet with cabinet level cooling capable of handling twice that density. While only utilizing a small portion of the 100,000 sq.ft. data center and a small portion of the data center’s 28 megawatts (“MW”) of available power capacity, the infrastructure being implemented is illustrative of the high-density power and cooling solutions required to support today’s sophisticated computing requirements.

“The Company is very proud of the progress made by Alliance Cloud and the operating team in Michigan. Moreover, the signing of this agreement is an important milestone in both the development of our data center business, which we expect to develop to 300+ MW of power over the next four years, and a crucial element in our transition to making the Company a pure-play in the data center space,” stated William Horne, CEO of Hyperscale Data.

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

FAQ

What is the power capacity of GPUS's Michigan Data Center agreement?

The initial agreement includes seven server cabinets using approximately 40 kilowatts per cabinet, with cooling systems capable of handling up to 80 kilowatts per cabinet.

What is Hyperscale Data's (GPUS) expansion target for data center power capacity?

Hyperscale Data aims to develop its data center power capacity to over 300 megawatts within the next four years.

How large is GPUS's Michigan Data Center facility?

The Michigan Data Center facility is 100,000 square feet with 28 megawatts of available power capacity.

What is the duration of GPUS's new cloud services agreement?

The agreement is a three-year contract with a Silicon Valley-based cloud services provider.

How many additional server cabinets can be added to the initial GPUS agreement?

The agreement allows for the addition of five server cabinets beyond the initial seven cabinets.