Hyperscale Data closes $1.2 billion master services agreement with California-based Neocloud for 20 megawatts of AI compute capacity at Michigan data center campus.
Hyperscale Data, Inc. (NYSE American: GPUS), an artificial intelligence data center company, announced the signing of a Master Services Agreement between Alliance Cloud Services, LLC, an indirect wholly owned subsidiary of the Company, and a California-based neocloud provider at its Michigan data center campus. The customer provides cloud and managed services delivering tailored, state-of-the-art compute resources and high-speed storage solutions at scale with industry-leading partners.
The MSA provisions for the deployment of 20 megawatts of critical AI compute capacity, expected to be operational in the fourth quarter of 2026. The customer receives an option to expand to 52 megawatts of critical AI compute capacity. The agreement carries an initial 10-year term with two five-year extension options exercisable by the customer. Under the Maximum Term, the MSA is expected to generate in excess of $1.2 billion in revenue. The customer also has rights to an additional 32 megawatts of critical AI compute capacity which, if exercised within the first two years of the initial term and extended through both five-year options, would result in total contract revenue exceeding $3.0 billion.
Alliance Cloud Services is procuring key electrical and infrastructure equipment to support rapid deployment and has begun retrofitting approximately 60,000 square feet of the Michigan Campus to support customer operations at an estimated cost between $100 million and $120 million for the initial 20-megawatt deployment.
As AI compute capacity comes online and customer workloads deploy, the Company expects to progressively reallocate portions of the Michigan Campus's power currently utilized for Bitcoin mining. The Company anticipates continuing Bitcoin mining operations at its Montana facility and may maintain certain mining operations at the Michigan Campus during the transition period.
"I am pleased by the progress we have made as we continue the evolution of our Michigan Campus from a Bitcoin mining-focused facility into a next-generation AI and high-performance computing campus," said Chief Executive Officer William B. Horne. "We believe our Michigan Campus is positioned to offer a top-tier AI compute environment, and these services are expected to begin generating material, high-margin revenue upon deployment, which may begin as soon as late September 2026."
"The signing of an MSA represents a significant milestone for the Company," said Executive Chairman Milton "Todd" Ault III. "We currently operate approximately 28 megawatts of Bitcoin mining capacity at the Michigan Campus. As the customer's deployments come online, we expect to allocate an increasing portion of the Michigan Campus to AI and high-performance computing workloads. We believe this strategy positions us to maximize the long-term value of the Michigan Campus as we work toward developing more than 300 megawatts of total power capacity."
Hyperscale Data believes the Michigan Campus may support phased long-term expansion opportunities, subject to regulatory approvals, financing, infrastructure availability, engineering studies, utility agreements and other factors. The Michigan Campus may ultimately support more than 300 megawatts of total power capacity. The Company cautions that these expansion concepts remain preliminary and subject to numerous risks and uncertainties, with no assurance that such expansion capacity will ultimately be available, developed, financed, approved, economically viable, or otherwise initiated or continued.
Through its wholly owned subsidiary Sentinum, Inc., Hyperscale Data owns and operates a data center for digital asset mining and offers colocation and hosting services for emerging AI ecosystems and other industries. Hyperscale Data's other wholly owned subsidiary, Ault Capital Group, Inc., is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with global impact.
Hyperscale Data expects the divestiture of Ault Capital Group to occur in the second quarter of 2027. Upon divestiture, the Company would be an owner and operator of data centers supporting high-performance computing services and a holder of digital assets. Until then, the Company will continue providing, through Ault Capital Group and its wholly and majority-owned subsidiaries and strategic investments, mission-critical products for diverse industries including AI software platforms, equipment rental services, defense and aerospace, industrial, automotive and hotel operations. Ault Capital Group actively engages in private credit and structured finance through Ault Lending, LLC, a licensed lending subsidiary. Hyperscale Data is headquartered at 11411 Southern Highlands Parkway, Suite 190, Las Vegas, Nevada 89141.
On December 23, 2024, the Company issued one million shares of newly designated Series F Exchangeable Preferred Stock to all common stockholders and holders of Series C Preferred Stock on an as-converted basis. The divestiture will occur through voluntary exchange of the Series F Preferred Stock for shares of Class A Common Stock and Class B Common Stock of Ault Capital Group. The Company reminds stockholders that only holders of Series F Preferred Stock who surrender such shares and do not properly withdraw such surrender in the exchange offer will receive Ault Capital Group shares and become shareholders upon divestiture.
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 include statements that are predictive in nature and depend upon 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 based on current beliefs and assumptions subject to risks and uncertainties. Forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update them publicly in light of new information or future events. Actual results could differ materially from those in any forward-looking statement due to various factors. Additional information, including potential risk factors, is included in the Company's filings with the U.S. Securities and Exchange Commission, including Forms 10-K, 10-Q and 8-K, available at www.sec.gov and hyperscaledata.com.