Q1 2025 Summary
Published Jan 21, 2025, 9:58 PM UTC- Strong and increasing demand from multiple hyperscalers for 2025 and 2026 capacity, with significant inbound interest from three additional hyperscalers, indicating the potential for new contracts and expansion opportunities.
- The company expects to begin deploying additional GPU clusters starting in the second half of their fiscal year (beginning December 1), due to strong market demand, improved financing structure, and a boost from a recent investment in September, which increases visibility and interest.
- The company is receiving potential offers from hyperscalers that include capital to build and upfront payments, reflecting high demand and favorable financing options; the scarcity of capacity for 2025 and 2026 is creating attractive opportunities for the company to monetize their campuses.
- The lease agreement with the U.S.-based hyperscaler for the Ellendale HPC Campus has not yet been finalized, and there is uncertainty about the timing. Despite stating that they are "98.5% or 99% there", the process could still take up to 6 to 8 weeks, and the company has missed previous deadlines, creating potential delays in revenue generation. ,
- The exclusivity period with the hyperscaler has expired, and they chose not to renew it, which could indicate potential issues or delays in finalizing the lease agreement.
- In the Cloud Services segment, customers are debating whether to deploy current generation GPUs or wait for the next generation Blackwell, which may delay deployments of additional clusters and impact revenue growth in this segment.
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Hyperscaler Lease Finalization
Q: What's the status of the 100 MW hyperscaler lease finalization?
A: Wesley Cummins stated that there's very little left on the lease, and it could be finalized in a matter of days or within 6 to 8 weeks. They are at 98.5% or 99% completion, mostly clerical at this point, and he is confident the lease will get signed. , , -
Additional Hyperscaler Demand
Q: Are you engaging with potential additional hyperscaler customers?
A: They've seen significant interest from three additional hyperscalers seeking 2025 and 2026 capacity, with potential for a new site in the Dakotas. They could see another LOI by the end of calendar 2024. -
Funding for Buildings 2 and 3
Q: How are you planning to fund buildings 2 and 3?
A: They expect to have leases signed and project financing in place before proceeding with significant capital expenditure on Buildings 2 and 3. They're aiming to have Building 2 ready in the second half of calendar 2026 and Building 3 in the second half of calendar 2027. , -
Economics of Additional 300 MW Lease
Q: Will the economics be similar for the additional 300 MW lease?
A: The initial lease will be for 100 MW, and the other 300 MW will be in a different form, but economically they will look very similar. The first lease is expected to be a co-location sale lease at $1 per kilowatt per month, while the remainder is based on a yield-on-cost model. , , -
GPU Business Expansion
Q: What's the outlook for deploying additional GPU clusters?
A: They expect to start deploying additional clusters in the second half of their fiscal year, which begins on December 1. They have reserved data center capacity at attractive prices and are working on appropriate financing. Customer demand is strong, and deployments may depend on hardware availability. -
Cloud Services Pricing and Turnover
Q: How is customer turnover and pricing in Cloud Services?
A: Pricing has been flat for almost the last year at about $2.20 per hour for bare metal GPUs. They continue to expand with their largest customer and see significant demand growth from enterprise and AI startup markets, despite some uncertainty with one customer. -
Heat Recirculation Initiatives
Q: Are you exploring solutions for heat recirculation?
A: Yes, they are working on methods for capturing waste heat from their liquid-cooled HPC facilities. They plan to deploy solutions such as supporting agricultural applications like greenhouses or aquafarming in calendar 2025.