Hyperscale Data has set a minimum valuation of $750 million for its Michigan AI data center campus and is evaluating str
Hyperscale Data, Inc., trading under NYSE American ticker GPUS, announced today that its management has established $750 million as the minimum valuation at which a sale of the Company's Michigan AI data center campus would merit serious consideration. Management currently estimates the campus could support valuations ranging from approximately $750 million to $1.25 billion, reflecting the economics of an executed master services agreement, existing infrastructure, power access, expansion potential and comparable valuations in the public AI infrastructure sector.
The Company is evaluating multiple strategic alternatives to maximize stockholder value. These include a potential outright sale of the Michigan Campus, an initial public offering of Sentinum, Inc., a wholly owned subsidiary that owns Alliance Cloud Services, LLC, in which a minority stake would be sold to fund facility expansion, or continued ownership and development of the business. No definitive decision has been made.
Alliance Cloud Services has recently entered into a master services agreement with a California-based neocloud provider for deployment of an initial 20 megawatts of critical AI compute capacity at the Michigan Campus. The agreement has an initial 10-year term with two five-year extension options exercisable by the customer. If both extensions are exercised, the initial 20 megawatt deployment is expected to generate more than $1.2 billion in aggregate revenue over the full 20-year term.
The master services agreement also grants the customer the right to deploy an additional 32 megawatts of critical AI compute capacity. Should the customer exercise this right within the first two years and the additional capacity continue through both extension terms, total contract revenue from the potential 52 megawatt deployment is expected to exceed $3.0 billion.
The Company has previously announced that the Michigan Campus could ultimately support more than 300 megawatts of total power capacity. However, development of any capacity beyond the initial 20 megawatts is subject to financing, regulatory approvals, engineering considerations, utility agreements, infrastructure availability, customer demand and other conditions. There is no assurance that additional capacity will be developed, financed, contracted or placed into service.
Milton Todd Ault III, Executive Chairman and the Company's largest stockholder through Ault & Company, Inc. and its affiliates, stated that over more than three decades as an investor, he has observed markets fail to reflect fundamental value present in assets. He believes the Michigan Campus represents such a case and that the Company's current market valuation does not reflect the campus value, the long-term customer relationship opportunity or its strategic power and infrastructure importance. As the largest stockholder, he emphasized that the Company will not rush into a transaction for its own sake but will evaluate the campus based on underlying fundamentals and long-term potential rather than solely the Company's current market valuation. He stated that management believes there is an extraordinary disconnect between public-market valuation and the fundamental value represented by the Michigan Campus and that the asset alone warrants serious consideration at valuations beginning at $750 million.
William B. Horne, Chief Executive Officer of Hyperscale Data, noted that publicly traded companies exist with comparable assets and business models to the Michigan AI data center, and that public-market valuations of these comparables provide important context for the $750 million to $1.25 billion value range discussed. He stated that the disparity between the value reflected by these public companies and Hyperscale Data's current valuation is substantial. Horne said management intends to demonstrate this disparity to the market and is prepared to pursue either an outright sale or bringing the data center business to the public markets as a separate company in which Hyperscale Data retains controlling interest, with the objective of demonstrating created value and pursuing the path that maximizes value for the Company and stockholders.
Management's valuation range of approximately $750 million to no less than $1.25 billion is based on presently available information and does not constitute or reflect receipt of an independent appraisal or fairness opinion. Successful execution of the initial AI deployment, additional customer commitments and development of additional power capacity could support valuations above management's current range. Management does not presently intend to recommend an outright sale at valuations below $750 million. No assurance exists that the strategic review will result in a transaction or that any transaction will complete at the stated valuations.