Hyperscale Data Sets Minimum Sale Threshold for Michigan AI Data Center

Hyperscale Data, Inc., an artificial intelligence (AI) data center company, has established a minimum sale threshold of $750 million for its Michigan AI data center campus, according to a recent press release. The company believes the value of the campus could reach or exceed $1.25 billion, based on the economics of a recently executed master services agreement (MSA) and the potential for expansion.

The MSA, signed with a California-based neocloud provider, secures an initial 20 megawatts (MW) of critical AI compute capacity at the Michigan Campus. This agreement has a 10-year term, with two five-year extension options. If both extensions are exercised, the initial 20 MW deployment is expected to generate over $1.2 billion in aggregate revenue over the 20-year term.

Furthermore, the MSA allows the customer to add an additional 32 MW of capacity within the first two years of the initial term. If this option is exercised and the additional capacity is maintained through both extension terms, the MSA could generate over $3 billion in total contract revenue from the potential 52 MW deployment.

Hyperscale Data's management believes the Michigan Campus could ultimately support more than 300 MW of total power capacity. However, the development of any capacity beyond the initial 20 MW is subject to financing, regulatory approvals, engineering, utility agreements, infrastructure availability, customer demand, and other conditions. There is no guarantee that additional capacity will be developed, financed, contracted, or placed into service.

The Company's current market valuation does not reflect the fundamental value of the campus, the long-term customer relationship, or the strategic importance of its power and infrastructure."

William B. Horne, the Chief Executive Officer of Hyperscale Data, added, "We are evaluating multiple strategic options to maximize stockholder value, including the potential sale of the Michigan Campus, an initial public offering (IPO) of Sentinum, Inc., a wholly owned subsidiary of Hyperscale Data, or continued ownership and development of the business. Our objective is to demonstrate the value we believe we have created in Michigan and pursue the path that will maximize value for our stockholders."

The company is currently considering a potential sale of the Michigan Campus, an IPO of Sentinum, or continued ownership and development of the business. No definitive decision has been made, and any transaction would be subject to further evaluation and, as applicable, approval by the Company's Board of Directors. Management does not presently intend to recommend an outright sale at a valuation below $750 million.

Hyperscale Data's management believes there is a significant disconnect between the public-market valuation currently being assigned to the company and the fundamental value represented by the Michigan Campus. The company intends to make this disparity clear to the market and pursue the path that it believes will create the greatest long-term value for its stockholders.