GPUS Hyperscale Data Inc

Hyperscale Data, Inc. (NYSE American: GPUS), a diversified holding company (“Hyperscale Data,” or the “Company”), today issued a letter from its Chief Executive Officer to its valued stockholders.

Dear Stockholders,

As Chief Executive Officer of the Company, I wish to share the latest updates and insights into the Company’s strategic direction.

Hyperscale Data has achieved many milestones during 2024, and we believe those achievements will drive long term growth and shareholder value. In September of this year, we changed our name to Hyperscale Data and alerted the market of our intention to focus on the development of our Michigan data center (the “Data Center”). This is a strategic departure from our historical operations in which we focused on multiple industries as a diversified holding company. However, by year-end, we will have completed a one-time dividend of Series F Exchangeable Preferred Stock (the “Preferred Stock”) to all common stockholders and holders of our Series C Convertible Preferred Stock (the “Dividend”). The Dividend is important because our stockholders retain ownership of valuable businesses as we separate our non-core businesses held by Ault Capital Group, Inc. (“ACG”) from our data center business.

The Dividend was structured to provide holders of the Preferred Stock with an efficient means to exchange their shares into common stock of ACG. ACG is a wholly owned subsidiary of Hyperscale Data whose subsidiaries presently comprise all of Hyperscale Data’s subsidiaries, other than those entities that own or operate our Data Center. Specifically, the ACG entities, among other businesses, include our crane rental business, lending business, and hotel and real estate business. The completion of this dividend and the subsequent exchange into common stock of ACG, which we expect will be substantially completed by December 2025, is central to our corporate reorganization because Hyperscale Data will become a pure play organization focused solely on data center operations, and better situated to fully develop the Data Center.

The Data Center, a 617,000 square foot facility located on a 34.5-acre site, was acquired in January 2021 by our wholly owned subsidiary, Alliance Cloud Services, LLC. Since we acquired the Data Center, we have increased the power load from 1.5 megawatts (“MW”) to approximately 30 MW and the utility company that serves the Data Center has indicated that it has the ability to expand the capacity up to approximately 300 MW. Initial development included establishing an approximate 100,000 square foot section of the building following Uptime Institute’s Tier III guidance for primary electrical systems, a focus on physical security utilizing various surveillance techniques, multi-layered access and 24x7 onsite manned operations, and implementing multi-carrier geographically diverse routing for network connectivity.

We are currently in discussions with the utility and a top tier national real estate developer to both expand the power load of the Data Center and develop a plan for infrastructure upgrades necessary to support the growing demands of high-performance computing (“HPC”) services powering Artificial Intelligence (“AI”) solutions. This will be a multi-year project that could cost between $5 million and $10 million per MW of critical load required to support the operations of mission critical data center equipment, which we estimate would be around 200 MW, assuming a total power load of 300 MW, which includes power for support infrastructure and non-critical administrative systems. At the high end of our range, a build out project of this scale could cost $2 billion and likely require us to partner with a top-tier real estate developer and well capitalized customers to justify an investment of this magnitude. We believe the scarcity of available power presents a significant opportunity for the data center business. We are encouraged by our current discussions with potential partners, and we expect to execute a non-binding term sheet with a nationally recognized commercial real estate company for development of the Data Center and we ultimately expect to host HPC services for a well-capitalized hyperscaler.

Bolstered by rapid advancements and demand for next generation technologies that power large-language models, such as ChatGPT, the energy demand from data centers is expected to nearly double by 2030 and AI will be the largest driver. Importantly, we are at the inception phase of this AI movement, much like the Internet during the 1990’s. In 1990, few recognized the opportunity that the Internet would provide to small companies to capitalize on online commerce, personalization and the capacity to expand knowledge. Yet, by 1999, we had witnessed small companies overcome large, entrenched companies because they were more adaptive and able to leverage the Internet in such a way as to create new customer experiences and forge long-term relationships.

We intend to emulate this proven strategy and focus on long-term relationships and a market leadership position. Given the amount of capital necessary for our development plans and the long-term nature of the hosting arrangements we expect to consummate, we will primarily pursue relationships with well capitalized companies and in that regard, we are currently in discussions to lease the data center under long-term leases, with our emphasis initially on the existing 30 MW. Once we have consummated leases for the existing power capacity, we will turn to the entire expected available capacity of 300 MW.

Stockholders can review comparable transactions, such as the contract that Core Scientific, Inc. announced in June of this year, for more information on what potential contracts will mean for Hyperscale Data. The long-term hosting agreement announced by Core Scientific is expected to generate total aggregate revenue of more than $3.5 billion during the initial 12-year contract term on approximately 200 MW of critical power to host HPC services. We are seeking to enter into similar agreements and expect these agreements would result in significant revenue increases over the next 8-12 years. We are excited about replicating such success with our Michigan facility, which we believe will house a major hyperscaler customer in the foreseeable future. Inquiries for our Michigan facility span top-tier companies looking to establish long-term leases, leveraging the site’s potential to support AI advancements.

Our strategy is not without risk, it requires significant investment and the ability to attract well capitalized companies to partner with us. Currently, we have not yet entered into a non-binding term sheet for the development of the Data Center. Further, if our discussions result in the execution of a non-binding term sheet, consummation of a transaction would still be subject to execution of definitive documents, customary due diligence and approvals of the parties, which may not occur. Our development of the Data Center will also be subject to the Company’s receipt of state regulatory approvals, which it may or may not obtain. Lastly, our success will ultimately reside in our ability to attract a credit-worthy customer to contract for our HPC services, assuming we successfully develop the Data Center as we plan. While we are optimistic, we recognize these are significant challenges. During 2025, we will face well-funded competition, development challenges and the risk of execution. However, the HPC data center market should prove to be a very large market capable of supporting a number of companies and we believe that Hyperscale Data will be one of the companies that benefit. I am optimistic about the future and remain committed to maximizing stockholder value. We appreciate your continued support as we forge ahead in this promising landscape.

Thank you for your steadfast trust and commitment to our shared future.

Regards,

William B. Horne, Chief Executive Officer

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 https://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 Bitcoin 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 a 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