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On y'all. Welcome back to Blockspace Live, presented by CleanSpark. We've got a fat docket today.

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Up top first, Mara entering into an agreement to acquire a Matagorda County, Texas site that has the potential to scale up to a gigawatt in 2027 and two gigawatts in the near future.

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Following that, we hit on a landmark meeting today at the Public Utility Commission of Texas that will decide the future of how large loads interconnect to the grid, and specifically how much of the cost they will bear for not just transmission to their sites, but also for transmission maintenance for the grid in Texas.

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Following that, a bombshell short report from Hunterbrook Media for its capital arm, Hunterbrook Capital, claims that Bloom Energy could be the Theranos of the AI cycle.

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That's their claim, not ours, but they do get into some numbers that say the math doesn't quite make sense for Bloom, and also their CEO may not be telling the whole truth about where it sources the scandium for their energy cells.

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And we will cap today's stream with a letter from IREN chairman to say, "Hey, yes, we approved a fat stock package for our co-founders and CE- our co-CEOs, but what do you expect us to do? The stock's ripping."

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Yeah, I learned a new word reading, prepping for this, scandium. We'll hit on it in a second.

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Blockspace goes live Monday, Tuesday, Wednesday, Thursday, Friday, every weekday at 1:00 PM Eastern, featuring quick hits on AI, data centers, Bitcoin mining data centers, emerging tech, and markets.

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If you like what you hear, you'll love reading our newsletter dropped in your inbox every single day, covering the high points, the news we cover, and some other Blockspace content.

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If you miss the live stream, it shortly turns into a podcast right after we wrap up. You can find it wherever podcasts are streamed. And this show is brought to you by CleanSpark, NASDAQ listed ticker CLSK.

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More on CleanSpark later in the show. So Colin, we're gonna kick it off with Mara Holdings, formerly known as- The acquisition king of the current acquisition- Yeah, the acquisition king.

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B- they're on the AI leaderboard now. They, they bought leader- What do we, would we say that? Well, well, we'll get, we'll get into- I, I think to get on the leaderboard, you have to have revenue from AI...

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we'll, we'll get into it. We'll get into it. [laughs] But they said, they said AI, so now you can start pricing them as an AI. So, so okay. So here's, here's the, here's the headline. Um, as we at Blockspace report...

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How do I change? There we go.

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As we at Blockspace report, Mara is buying a powered land site in Matagorda County, Texas, just southwest of Houston, from e-fuels company HIF USA, giving it access to approximately two gigawatts of power capacity on a 1,200 acre campus it'll build with Starwood Digital Ventures for AI HPC and flexible compute.

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This deal closed July 2nd and is a milestone-based deal with the total maximum amount that could happen, pending some triggers, being $600 million. These milestones are

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regulatory approvals, site being under contract, uh, site under contract being acquired, um, approval to receive the power, and signing a data center lease with a third-party tenant. Right now, Mara stock is ripping.

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At one point was up 18% on the day. Now, uh, back down to t- 11 to 12% on the day. The investors like this news.

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Colin, I can dig into the deal a little bit more, or I can toss it to you for a quick take.

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So at 600 million total consideration, if all those milestones are hit, this is $600,000 per megawatt just with the one gigawatt 420- Are you sure it's 600,000? I, my math did, my math... Oh yeah, one gigawatt at 600.

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Two gigawatt- At one gigawatt- Okay... it's 600,000. But my question is, what's actually active at this site currently? And that is g- uh, uh, conveniently left out, obviously, right?

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And so the biggest question, I think, going forward with this, and this is coming in concert with the PUC meeting that we're gonna cover in the next segment, will Mara be able to reliably secure up to a gigawatt by 2027?

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I imagine they would not be touting this if there weren't a clear pathway to that. But if I had shares of Mara, my immediate next question would be, "Okay, well, what's actually active at the site?

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How are you going to scale when everyone in Texas and their grandmother is looking for every juice, power that they can find?

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And also, are you in talks with any tenants for this potential site already, or are you shooting first and asking questions later?" So- So- I don't have answers to those.

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Obviously, the Mara press release left us with very little by way of answering those. But that, to me, seems to be, or those seem to be the most outstanding questions with regards to this acquisition.

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Yeah, we don't know that I'm aware very much about this specific site. What's already there? What's the development landscape? Is this simply just a greenfield power land deal? I, yeah, don't know.

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Um, as per Mara's, uh, press release shown here, um, this, uh, can scale up to two gigawatts total by April 2028, but d- but, uh, but initially up to a one gigawatt of grid capacity by October 2027.

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Is this kind of a hybrid thing because it's a deal with an e-fuels company? HIF USA- Uh, the seller retains a bit of skin in the game. They will retain a minority ownership interest

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upon the execution of the, a lease with an, with an HPC tenant. Uh,

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this brings Mara's overall potential power pipeline to approximately 4.8 gigawatts if we include the pending Longridge and ener- energy and power close.

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And as you said, Colin, at 600 million pen, you know, hitting all milestones and, uh, at 600 million for the deal, hitting all milestones, that would imply, uh,

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uh, 600K per megawatt at one gigawatts and 300K per megawatt at two gigawatts. 300K per megawatt at two gigawatts is a very good deal for industry standards if I'm, if I understand them right. Uh, so- Yeah... to,

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to answer some of the que- one of the questions that I just asked, I consulted Jamie GPT as you were going through that, Charlie. Yeah. And so this is a greenfield.

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HIF, uh, issued a notice to, uh, uh, has issued a notice to proceed on a switch yard connecting the site to the grid with access to one gigawatt by 2027 and two gigawatts by April 2028.

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So it seems like the ball is already rolling for that. The reason I was wondering if there was already, if there were already assets on the site is HIF is an e-fuels and synthetic fuels company,

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and so this is a site that they are currently preparing, and I guess they decided, well, if we can get a $600 million payday, we might as well just go ahead and do that.

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So it seems like they already have some of the groundwork in place to access that two gigawatt pipeline. So clearly a good move on t- on Mara's part if they can realize that gigawatt pipeline.

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So, uh, Mara CEO Fred Thiel issued a statement alongside this.

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Quote, "This transaction advances our strategy of securing strategically located infrastructure assets capable of supporting high-performance compute and Bitcoin workloads.

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This acquisition meaningfully expands our long-term development pipeline and strengthens our ability to support high-performance compute and maximize the value over time."

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Conspicuously, Colin, Fred's statement does not say AI, and I'll even observe that the press release itself is really light on AI.

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In fact, actually arguably hints more at Bitcoin in the flexible workloads language more than it does AI.

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It does have, say, AI HPC, high performance, heavy compute workloads, but, uh, you know, given that this is 2027 and 2028, uh, Bitcoin could be very different regime then.

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Um, I don't know if this is a good thing or a bad thing, but, um, this does allow Mara to start... You could argue now you can start pricing Mara like an AI, more along these, like, AI HPC stocks.

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Uh, now that they do seem to be a side up, yeah. Yeah, and I would also say that I think the HPC line kind of covers the AI angle, right? I mean, if they don't use this for that, then [laughs]

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you're gonna see that 18% wiped off very quickly. Y- yeah, but I'm comparing this to other statements which conspicuously do not mention Bitcoin.

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So this retains some, like, flexible workloads a- and, like, Bitcoin reference. We'll see. A lot can happen in two years. Yeah, for sure.

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It would be interesting to see if they, when once they had the infrastructure in place, if they did try to just throw some containers on there to monetize part of it. I doubt they will do that, but...

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Yeah, I m- it's, it's common for, like... It, it's a common strategy, we'll see how successful it is, to use Bitcoin as, like, a bridge load

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if you are sitting on your hands waiting for a tenant, or you don't want to sign a deal with a tenant, or you have to consume load today. Bitcoin mining is sometimes can be an option for that. All right.

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Anyway, so Mara pigs, uh, can, um... They can squeal [laughs] at us, uh, for, uh, having been critical of Mara, and here you guys go. I'll throw you some slop. There's a positive Mara news.

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Uh, look at how high the stock's going. Uh, yay, [laughs] Marathon. Okay.

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You know, I do think, just going back to one of my original questions, with the interconnection part secured with this, that's, you know, one of the bigger hurdles.

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It's unclear whether or not they have the actual PPA in place. But clearly th- one of the biggest moves that Mara has made so far into this AI and HPC pivot.

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You know, the Xion acquisition arguably was a bit of a flop in the sense that it's not in a tier one market for this compute load, and it's actually kind of unclear as to what the advantage of that is considering they don't own the company 100%, they have the majority stake.

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But with this, I think, to your point, Charlie, leading o- off the second, it's like the furthest inroad they've made for the HPC pivots to date.

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So we'll be keeping an eye on it, and as always, we'll have updates once they hit the wire, if they do. All right, we're gonna keep rolling. We're gonna dive into the two media stories, ERCOT and Bloom Energy here.

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But before that, a word from our sponsor, CleanSpark. [gentle music] We are CleanSpark, America's Bitcoin miner. A publicly traded company with the largest operating hash rate.

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Learn more about the intersection of energy and Bitcoin at cleanspark.com.

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If Bitcoin's actually the best money and it's the thing that people should accumulate and it's the best risk-adjusted asset, I lose zero sleep about whether or not that's gonna happen. I, I just ask the question of when.

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It's literally a matrix math that you're running on large pieces of cable. The Bitcoin miners can absorb that energy. And, and in many ways, this feels like a second bite at the apple to build a new internet.

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All right, Charlie, two meetings coming today out of Texas. The most important one is the PUC meeting, the Public Utility Commission.

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There's another one with ERCOT, but that's more of a procedural thing to make sure that paperwork for the new Batch Zero rules are being filed accordingly.

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But so we'll, we'll focus mostly on PUC, and I'll touch on the one with ERCOT specifically regarding Batch Zero. But I'll get the-- I'll get this up right now.

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PUCT meeting at nine thirty AM Central Time in Austin, Texas. Then also we've got ERCOT's own meeting taking place, which I believe is actually, um, is a web meeting, uh, later today or today at the same time.

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And the most important part of this is the PUC element.

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So the PUC is meeting today to decide whether or not they are gonna push forward with finalized rules and requests for comment on specifically how large loads pay for grid infrastructure and whether or not to move from four CP to twelve CP.

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So the four CP program, as we cover a lot on here, is this four Coincidental Peak program, where during the hottest months of the year, June, July, August, September,

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there are these th-these events known as the Coincident Peak, where power prices spike.

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And oftentimes large loads, specifically Bitcoin miners and some data centers, will try to curtail in anticipation of those so that they don't share an outsized cost on their electricity, considering this is the time when residences are at home ripping their ACs, businesses are ripping their ACs, and it typically there's a lot of stress on the grid at these times, and power prices spike accordingly.

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So one of the things they're debating is moving this towards a twelve CP program where they do-- these, these coincident peaks will occur every month.

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And part of the reason for this, as Texas has moved increasingly towards renewables, the winter months have gotten just as dicey as the summer months because the wind, the wind, uh, don't blow or blowing too hard or the sun don't shine.

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And so you don't have anywhere from like twenty to thirty percent of the electricity-producing assets in Texas actually operating during those moments.

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Winter Storm Uri is the premier example of when this can go very poorly for the Texas grid. Winter Storm Uri caused immense destruction to the Texas grid.

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People were without power in some cases for, I believe, a, a, a couple of weeks with, with the blackouts that happened as a result of that.

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But the other thing that is on the docket for this meeting is an elimination of interconnection cost allowances for large load customers. This is very critical because typically

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before this AI and Bitcoin mining boom that happened in the state, utilities would cover the cost, or at least most of the cost, for transmission to end users in the industrial consumer bucket.

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So if you were building a large site in Texas, the utility would throw you a bone and throw you an allowance to build that transmission to you. That is going to be done away with entirely, I think.

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I, I, I think it's safe to say that the commission will decide that that can't be the standard going forward. Since there's so much demand in Texas, it is a seller's market for energy right now.

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The utilities have a lot more leverage than they have in the past, and they're going to demand that these data centers cover some of those costs to get transmission and electrical infrastructure to these data centers.

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The other piece of that is requiring large loads to pay a portion of system upgrades costs. So this goes even beyond the interconnection costs that they will likely have to pay.

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The utility commission is saying, "Yeah, in addition to that, you're going to need to help a little bit more with paying for maintenance on the transmission and the infrastructure that we already have in place."

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So a double whammy there in terms of overall transmission costs for the data centers.

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And then the other one is requiring annual updates to class allocation factor values used in proceedings like the transmission cost recovery factor.

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So kind of a, you know, trying to make sure that everything's running smoothly and making sure that they have clear views into the cost these data centers are having to foot.

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The last one, also very big, a minimum billing demand applied to large loads. Now, this is in the orbit of the four CP, twelve CP rule change proposal as well.

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As I understand it, what the PUC is basically saying is if you do curtail and you're on a demand response program that allows you to do so, you're not going to be compensated as much as you had in the past.

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And I believe that they are going to be setting a s-- a basically a floor on which you will have to pay something to participate in those programs.

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The rationale behind this is that if they at least pay something, the grid is going to not make sure that they don't lose their shirt in these instances, because we're talking about gigawatts worth of load at this point that could just [fingers snapping] cut off like that.

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And if the data centers aren't footing some of the bill for the generation that they're not consuming at that time, then that gets passed on to the utility or in some cases the residents in terms of higher power costs.

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And that's the entire rationale behind this. Governor Greg Abbott issued a mandate to the PUC and to ERCOT To get, to basically

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have a joint statement or a joint understanding on what these new rules will be going forward so that the residents of Texas are not footing the bill for all of these data centers indirectly as they move into the state.

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I believe they have a July, uh, a July 17th is when Governor Abbott wants that memo and they, and then there is a deadline for the new rule book to be firmly decided by December 31st, so the end of this year.

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Got a few more things to cover just to make sure this is holistic here, Charlie. But before I do that, I wanna throw it to you for second thoughts.

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Yeah, I think it, you know, if you're watching this and you're listening to this, you, you really don't know much about ERCOT or the Public Utility Commission of Texas and, and like, the, much about the 4CP program.

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Miners and data centers have been going to Texas both because they're cheap energy, but also because of the n- of how they're able to play the power markets.

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And that has been because they can trade these power markets, they can, uh, really optimize the overall load profile of their data center, and that is kind of downstream of this type of, uh, regulation, the 4CP, which is now con- you know, on the, uh, cons- it's, it might be changed.

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So if it's changed, that could significantly affect the entire, like, regime of how profitable a lot of these strategies have been.

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Um, I don't currently have a position, but it like, uh, now basically I think you have to become much, much more sophisticated. Bitcoin miners, uh, are a very different load profile than AI, uh, training and inference.

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And so, but they're swept up in this, uh, in this, in, in this regulation because, um, I believe like, the, the cutoff is like 75 megawatts, of which like, a significant number of Bi- Bitcoin miners back.

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Most of them, the most large ones in Texas, are over 75 megawatts. The thing is, Bitcoin miners tend to be more agile than AI HPC right now.

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And, uh, and so I, they might be able to adapt better, but it, uh, as far as I'm aware, reading the language and listening to you talk about it, it doesn't seem that there's differentiation, differentiation between industries and like, agility of, uh, doing the variable load, which I think is

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one of the... You know, it's funny, this is kind of at the intersection of everything we talk about on, uh, in previously The Mining Pod and now on the show. I'll toss it back to you to keep going.

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Yeah, and on that note, there really isn't a differentiation, although there is a new, there are new rules for ERCOT

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evaluating what they call large loads, which is anything over 75 megawatts or above, which would include, you know, obviously probably any data center in the state barring some smaller ones and a lot of the, uh, big, medium to big-sized Bitcoin mines.

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So tho- this is called Batch Zero. This is the new im- mid- implementation of new rules for how these large loads connect to the grid.

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Th- these rules are already in place, and ERCOT's meeting today specifically is about looking at how the paperwork deadline, July 10th, for this Batch Zero is go- coming through the pipe.

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And it's not a vote on new rules or anything, it's really just a procedural thing to figure out, okay, is this new paperwork process working properly? And

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the important thing to also note about this Batch Zero rule change is that instead of looking at each load individually, any load of 75 megawatts is now studied system-wide alongside every other qualifying project.

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'Cause there, there's just been so much demand that they now have to look holistically at everything that's going on rather than individually to make sure that the grid's not gonna break.

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Going back to the importance of the PUC meeting, and to be clear, what's being, what's being pushed forward today is the commissioners are voting on whether to formally publish this, these proposed rule changes and then submit those for public comment.

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If it passes, the PUC will have formally launched its rules to, uh, make all of those changes that we just discussed.

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And to get an idea for what's at stake, the Texas grid spends about 5.5 billion annually on transmission, maintenance, and other costs.

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And about 44% of that can be attributed to being passed on to ratepayers in residential areas.

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And this is why Greg Abbott is saying that we, we have to put an end to this postage stamp system, as it's called, because ultimately, the vast majority of upgrades and maintenance going forward will be to the benefit of these data centers.

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Also benefit the residents to some extent, but the majority of demand is not coming from commercial or from residential areas currently.

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It's coming from these industrial large loads in, you know, the far-flung reaches of Texas and outside of the city centers.

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And so what Abbott ordered is, again, he wants that joint memo by July 17th, but he also wants, uh, to actually start cutting those residential transmission costs by July 31st.

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And so they're right within that window with this PUC meeting, and then if everything goes according to plan, there will be new rules that are on the books by the end of the year.

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Look, Texas and the Texas grid may have a revenue problem. They've gotta figure out how to, how to, uh, respond to their grid changing dramatically over the past four years.

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So, um, it's, yeah- And, and the silver lining to all of this is I think probably, I, I'm not-

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I'm obviously not an expert on public utility responses to energy prices- Oh, okay, we're Talking Heads, we're experts on everything.

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But, uh, you know, I would imagine that the PUC and ERCOT have moved quite quickly on this.

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And to me, I think it's an excellent case study for how a grid and government can adapt to certain white swan events like this, where now they have this kinda good problem of all these businesses wanna move there, but you wanna make sure that you're not screwing your residents and screwing your populace.

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And so in the context and in the conversation of AI driving up energy costs, if they're successful at mediating all of this and getting these rules implemented in a way that doesn't piss off the data centers and doesn't,

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you know, uh, railroad their residents, then this will be a very good example to point to, to say, you know, it's almost a policy choice if you do let this impact your communities.

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If you're letting these companies come in here and then they suck up all the energy and the energy prices go up, Texas could serve as a case study for that doesn't have to be the case.

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It th- doesn't have to be a dilemma.

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Um, I'll point out, you know, uh, if they manage not to totally, uh, hamstring the market and find some kinda happy medium which does, uh, strengthen the revenue, uh, towards the grid, and also not totally disincentivize existing data center players, um, is this a win for deregulated energy markets?

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Because pretty...

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I mean, if you look at these things, these things, you know, they, they think on a 30-year timeline, so to be able to respond this quickly and institute new, like, pretty transformative regulation and pricing, uh, is an opportunity.

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Um, h- I don't, you know, there's probably a lot of people who are, who have very strong feelings about this, but- There's a lot of pearl clutching on that. Yeah.

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I was having a conversation with one of my friends from Europe a while back, and I was talking about the surge in energy prices around the US, and using Texas as an example, and looking specifically before they implemented massive battery shortage, or storage.

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The, the penetration of renewables was causing a huge problem in the summertime, and it was actually causing energy price spikes. And he was saying, "Well, is that because Texas has less regulation?"

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And I said, "Actually, no. Because the fact that ERCOT is a less regulated market and a more free market for energy, Texas has historically had some of the lowest energy costs in the nation." Right. Yeah.

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And giving, giving rate- payers the choice to choose between utilities is pretty amazing when you think about it. Most j- most residents in the US operate under a monopoly. You know, I have one choice here in Oregon.

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I have Pacific Power, and they suck. I would love to have more than that. [laughs] But I'll leave it there. Look, tell your Europoor's scoreboard van, what's your cost per kilowatt hour? How much does it cost?

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Well- Can you, can you buy a house? Funnily enough, this was a Belgian friend, so if I say scoreboard, he's gonna point to the 4-1 win in Belgium over the [laughs] US in the World Cup. Maybe we, we need to wait...

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[laughs] Yeah. Oh, yeah. Shoot, that does get us. Well, um, okay, we're gonna move on. Uh, we've got another very, very meaty story. Again, Colin's put in some legwork on this.

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This is the, the next one is we're gonna tackle Bloom Energy, and by we, I mean Colin. And we're [laughs] gonna dive into that right after a word from our sponsor, Luxur.

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So if you're interested and wanna learn more, go to luxur.tech/commander. All right, Charlie. I'm gonna start this by playing a short clip from Sammy Coppelman, publisher at Hunter Brook Media.

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And this is with regards to a short report that Hunter Brook Media put out regarding Bloom Energy.

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Now, I do want just to disclose that up front, Hunter Brook Media is the media arm of Hunter Brook Capital, and Hunter Brook Capital currently has short positions open against Bloom that resulted from this investigation that they did.

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So I'm gonna play this clip really quick. Yeah, and we, when we talk about rare earth materials in general, I mean, China controls so much, uh, so much of the marketplace.

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So are there other places in the world where a company such as Bloom could be getting scandium oxide, and specifically enough based on its backlog?

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We ran the numbers, we built a model, and we don't think that without China, Bloom could be getting enough. What's important here is that Bloom is a trust me story.

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This is a $70 billion company that for 20 years has essentially had no success, and now people are betting on it to power AI data centers around the world, when right now it's not powering a single AI data center, despite having a market cap bigger than Vistra Energy.

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And so I think the burden of proof at this point in Bloom's history is on Bloom to show that it can actually deliver, and I think the fact that they're lying about this raises the question, what else are they lying about?

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Hmm. Um, so how do you respond to the response from Bloom Energy? I thought- They say they're gonna correct the record. I thought the response was fascinating. We reached out for comment, as journalists do.

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They posted a blog post the night before we published, essentially claiming that they can power 25 gigawatts. Show me the scandium that enables that. And I think that our evidence is very clear. It's on our website.

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Our process is meticulous [laughs] and anyone can scrutinize it.

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Bloom is telling people to just trust them, and the truth is if you look at Bloom and its history, it's big promise after big promise, and they have never actually delivered on any of it.

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And you look at their customers now, customers like Oracle, and Bloom's buying that demand. They gave Oracle a huge stake in Bloom. And so I'd love to see independent people independently vet out Bloom's supply chain.

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I'm sure that every single one of them is gonna come away with the same conclusion that we had, which is that this company makes big claims that it can't actually back up of themselves.

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And I can't imagine a company with a bigger story and a bigger market cap than Bloom with less evidence to back it up. And look, I don't actually know, um, what's gonna happen with Bloom.

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We can just report the facts that we have. Yeah. But I think it's worth asking if there's a Theranos of the AI mo- moment, who, who is it? Little insinuation there. So in- Ooh...

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you know, my intro, I said that they said that Bloom is the Theranos. They- He didn't go out and say it, but he's basically implying it, right, with, with that comment. Okay.

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Before you go into the details, I think a little visual aid could help. [laughs] This is what scandium looks like. This is a metal. And why, what does the scandium go in?

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It goes in the Bloom energy fuel cells, like inside. So this is kinda the important context since scandium is used- Yes, that's- Yeah... that's good context. These are solid oxida- oxide fuel cells.

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They basically take natural gas and convert it into electricity without combustion, which sounds like that doesn't even exist. It does.

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A- and, uh, one thing I wanted to push back on with Sammy Copelman, he made it sound like they haven't delivered any of these. They, they have.

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There's, there aren't that many active currently, and we'll get into those numbers here in a second, but Bloom is building this technology. And it's- Yeah, I see pictures of them online. Like I'm- Pictures, yeah...

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going through and I... There's actual pictures. They look like they're deployed not in some kinda warehouse or, or display case, but like out in the wild, and I'm looking, "Oh, there's some deployed in- Yeah... Korea."

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It's truly incredible technology, and I think that what Hunter Brook's analysis boils down to is basically saying, you know, the technology's there.

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Is, is it there enough and is Bloom executing enough to justify a $75 billion market cap? And I, I think that that's a legitimate question. So let's get into the meat of the report here.

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There are basically five claims from Hunter Brook that says that Bloom is not the story that it is trumpeting itself to be. Number one, Bloom Energy uses Chinese supply but denies this publicly.

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Number two, there's not enough scandium to meet Bloom's five gigawatt projections. That's by, that's a 2030 projection. Number three, circular demand from joint ventures.

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Basically, the idea is that Bloom sets up these joint ventures with other companies and then these joint ventures end up purchasing inventory from Bloom.

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Number four, there's a huge backlog gap in terms of what they're actually buil- booking for revenue right now versus what they say they have under contract. Number five is a flagship project slipping.

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So we'll take these one by one, and the first claim that's super easy to address is that they do or do not use China for supply chains.

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So the CEO has stated that Bloom has, quote, "No China supply chain," end quote, and doesn't depend on China for scandium.

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I'm just gonna go out and say this right now, that that, it just strikes me as totally patently false. China, according to West Point, according to one of West Point's research, uh, arms, uh,

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controls 90% of all ref- scand- uh, scandium refine, uh, refining. So i- if, if that's the case... Yeah, let me... The, the, uh, right here, um, uh...

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Yeah, the Modern War Institute from West Point puts China at controlling over 90% of global refined scandium chemical production

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and effectively 100% of all metallized scandium used in advanced semiconductor applications. So- I also...

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It's, it's also like it should be really simple to prove to the, to the opposite, that you have other s- like scandium- Mm-hmm... suppliers. Like, you should be able to like, "Here's the purchase orders." Yes.

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"Here's the disclosures." Like, a- and, and parade out some dude who sells you scandium who's not Chinese and is like, "I have an American or a South American company," or something like that, you know? 100%. But yeah.

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And, and anyone who knows enough about

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how much China controls the critical mineral supply, this has been something we've been talking about for the last year or so, fact of the matter is depending on what mineral and metal you're looking at, China has anywhere from 50 to near 100% of the refining capacity.

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And, and these are, th- these are all of the metals, the alphabet soup of metals that are the backbone of this entire AI revolution, the green energy revolution, most electronics.

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Like you said, Charlie, you, you learned about a new metal today.

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You could probably wake up every day and then do research on a metal that you've never heard of that is critical to the AI and the green energy and electri- electrification pivot.

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So the fact of the matter is even if you didn't know anything about Bloom Energy, the CEO saying that they source none of it from China could reliably be easily dismissed from the fact that you don't have anywhere else to go.

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Yeah. Especially- It doesn't pass, doesn't pass the gut check to me. No. Happy, happy to be proven wrong. Yeah.

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Maybe they can find the other 10% in other countries and that's enough for their appetite for these fuel cells.

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But according to Hunter Brook's data- They don't even have enough-- They won't even be able to get enough from what is currently produced out of China. We'll get to that in a second.

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In Hunter Brook's reporting, they actually went to a supplier in China that claims to do business with Bloom.

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This is Hunan Oriental Scandium, which claims to ship scandium oxide directly to Bloom's Delaware plant, or it claimed to ship it directly at least four times in twenty twenty-three through twenty twenty-four.

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The sales rep told Bloomberg, quote, "We are also Bloom Energy's..." Or sorry, told Hunter Brook, quote, "We are also Bloom Energy's largest supplier of scandium."

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And on how materials reach the US under Beijing's export controls, they said, quote, "Not exported directly." The export controls are really important. We'll get to that in the next segment.

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So there are three avenues through which these Chinese companies reportedly get scandium to Bloom Energy. One is through Thailand.

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Three Circle Group's Thai subsidiary shipped a hundred and fifty-four metric tons of ceramic electrolyte membranes to Bloom with raw materials sourced from China per Three Circle's own Hong Kong IPO perspectives.

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They also apparently have avenues through Japan and South Korea. Pretty common. Uh, it kinda reminds me of the ways in which Asics would make their way from Southeast Asia to America. Yeah. That was my first thought.

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I was like, "Oh, he's purchasing the scandium through Malaysia." Yeah. I mean, bro, we all know that- We've all been there. Yeah. We, we- Who, who, who hasn't tried to skirt export controls? Just, just say it. You know?

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You're being pressed. Yeah. So y- and this is important too when you consider at least a few years ago the fact that China had the largest tariffs on its goods coming into the US.

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I don't really know where the tariff regime is now. The news cycle moves so fast. I mean, we're back in the Iran War when we were reportedly out of it.

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Tariffs were a huge stinker in the beginning of twenty twenty-four, and now no one talks about them. Are they even still in place?

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Point being, though, if you wanted to get around those tariffs, one way to do it, like with Asics, would you ship or offshore your manufacturing from China somewhere else and then ship it in through other Southeast Asian countries?

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All right. So claim number two. Claim number two is that there's actually not enough supply of scandium to meet what Bloom is saying it plans to deliver through twenty thirty.

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So according to Hunter Boo- Brook s-supply and demand model, which they backed out looking at Bloom's patents and basically had a rough figure for how much scandium needs to go into a single unit for these energy cells, and then took that and extrapolated out to the five gigawatt figure that Bloom hopes to produce by twenty thirty, and then looked at global supply of scandium.

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So according to their estimates, Bloom needs roughly two hundred and twenty tons of scandium oxide annually by twenty thirty to hit Wall Street five gigawatt expectation.

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This is against projections of total global supply of two hundred and forty tons and total global demand of three hundred and ten tons annually.

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This includes scandium is used in weapons systems too, so Bloom's competing with the likes of Lockheed Martin and Raytheon here for scandium. And

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importantly, there are industry estimates that say that global capacity for scandium oxide was over ninety tons in twenty fifty, in twen- sorry, in twenty twenty-five, and global production only totaled eighty tons, with China being the leading producer.

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So if you look at that and then you take again into, you take into account the War Institute at West Point's

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estimate that China controls ninety percent of the global refined scandium chemical production and almost a hundred percent of the metallized scandina- uh, scandium production,

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there's almost no way to get around the fact that the only place to get this is from China, and there might not even be enough for Bloom alone, let alone the rest of the world.

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And this is really critical considering the whole fear around China's control of these critical minerals and why West Point even has studies on it is the fact that these things are used in weapon systems, they're used in AI, they're used in, uh, electric cars, they're used in solar panels, et cetera.

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China now has export controls where these Chinese companies have to get permission for whom they're selling to from the Chinese government now, and Beijing could cut off the supply chains like that if they wanted to.

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So if you're looking at that, this is the whole reason why Bloom probably has to push back heavily against this and claim that they don't use China at all, because that is an extreme threat to the entire business model.

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It's predicated on China just not shutting down the whole supply chain, which they can do because they control the whole supply chain currently. So that's an existential threat to the business outright right there.

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[lips smack] Um, all right, moving on to the last few claims.

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I think those are the biggest ones, the, the reported deficit of scandium supply and also the fact that Bloom Energy is actively saying that they don't source from China when they actually do.

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If I'm being charitable, I think the idea is that, well, actually, the shipments come from Thailand and Japan and South Korea.

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Even though some of them may have come in twenty twenty-three and twenty twenty-four, Bloom is no longer using those avenues.

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They're, uh, they're skirting export controls by going to other Southeast Asian countries to get their supply, but those countries are sourcing it from China. All right.

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The circular demand piece is really, really interesting here.

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So according to, um, according to, I believe, uh, Bloom's own financials and Brookfield reporting, seventy-four percent of Bloom's Q4 twenty twenty-five revenue, seven hundred-- f- five hundred and seventy-four million of seven hundred and seventy-eight million, came from joint ventures Bloom part owns with Brookfield, um, and e- entities that didn't even exist until August twenty twenty-five.

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Bloom's own footnotes concede counterparties, quote, "may be a project finance affiliate rather than the ultimate end user."

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The Brookfield fund's designated anchor tenant is Radiant, uh, which is Brookfield's own cloud company. Which, uh, reportedly has no CEO or customers.

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So the idea here being is that Bloom is setting up JVs with Brookfield, and then those JVs are purchasing their units, and that accounted for three-quarters of their revenue.

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Um, Hunter Brooke also flags that Bloom appears to be recognizing revenue, not just before deployment, but before billing.

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A new $62.3 million, quote, "non-current contract assets" quote line appeared in 2025 for their filings, which is revenue recognized where billing milestones haven't been reached and invoicing is more than a year out.

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78% of it is re- of it is related party transactions. Deloitte flagged this J- flagged the JV accounting as a critical audit matter, uh, I think I believe adding to Hunter Brooke's concerns here.

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And then claim four also has to deal with revenue. Bloom markets has an unaudited $20 billion backlog. Its audited remaining performance obligations are almost $500 million, which is a 40X gap.

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So the idea here being basically that they have what they claim is a $20 billion backlog, but only $500 million of that is currently, um, i- i- is currently in the works, and there's no real way to audit this unless they bring receipts.

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So the question that Hunter Brooke is asking is how much of that is reliable?

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And even of the stuff that is on the books, there are non-binding use arrangements and, uh, th- there are, uh, five to 20 year of service revenues that customers can just cancel annually if they don't want to actually have those services rendered anymore.

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Last part, Charlie, and then I'll throw it to you, uh, is this claim from Hunter Brooke that flagship- these flagship projects are slipping from Bloom.

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Oracle's Project Jupiter, which is up to 2.45 gigawatts in New Mexico, has no approved air permit and gas pipeline is stuck, um, within regulation.

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SimuAnalysis pushed the first power for the site to 2029, and it could even slide into 2030.

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AEP has 2.65 billion orders tied to a Cheyenne data center campus that lost Crusoe as developer, and that's been pushed to no later than year-end 2020-- or pushed to no later than the year-end 2028, and even no later than 2030.

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The, um, the 2028 was from a February deck, and the 2030 was from a May deck. And so those are two of their primary customers in terms of s- very large orders, and those projects are up in the air currently.

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Bloom does have 75 megawatts active at Equinix across 19 data centers.

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Uh, there's roughly 30 to 40 megawatts installed at a New Jersey site with Nevius and roughly 1.6 to 2.8 megawatts installed with a CoreWeave site in Volo, Illinois. So

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again, fuel cells are out there. The question is, are-- do they actually have enough customer demand for all of this backlog that they're claiming that they have?

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And also, can they even end up scaling to the size that expectations place them at by 2030? I'm not taking a stance on this. I will say, though, they had a revenue of $251 million

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in Q1, uh, 2025, and... Or I believe that's Q4. Let me s- uh, go back to the Q4 numbers. $778 million in Q4 2025, and the, the market cap is at $75 billion currently,

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which gives it roughly a tra- uh, the trailing 12-month revenue price to sales is like 32.5x. Ford is 22.1.

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That's pretty rich valuations, and I think that's at the heart of Hunter Brooke's investigation here is basically, is this company just grossly overvalued based on the fundamentals right now and what they can actually do to reliably scale into the future?

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Bloom Energy has been one of the most booming stocks over the last few years in terms of the AI boom, partially because the technology is pretty incredible.

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So I don't have a stake into whether or not Bloom is just absolutely fudging everything, 'cause quite frankly, Charlie, I don't wanna get sued. But- Yeah...

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I will say Hunter Brooke raises some really, really good points in terms of what's happening with this stock currently, and I believe the sh- the shares of Bloom fell, like, 12% after they published their report. Yeah.

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Um, Bloom Energy's still doing okay, though, I think overall. Um, uh, I mean, it's technically up on the five-day, still up on the [chuckles] month- Yeah...

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up on the half year, which I'll note is around when, uh, AI investment wunderkin- wunderkind Leopold Aschenbrenner started disclosing that his fund, Situ- uh, Situational Awareness, had purchased Bloom Energy.

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At one point, uh, as of the end of Q1 2026, it was, uh, Situational Awareness's largest single holding at $875 million, uh, above CoreWeave- That's crazy.

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I wonder if that was on account of just not rebalancing, 'cause Bloom Energy's up 1,000% over the last five years [chuckles] and 824% over the last one year. Yeah. So, um,

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yeah, I don't know if he still owns it 'cause, you know, we only get quarterly disclosures from Leopold. But, uh, yeah, so we'll see Bloom Energy. Uh, you know,

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is it, is it a good clean energy battery fuel cell story without a little bit of a spicy potential scandal? And also- Without a little bit of drama Without a little bit of drama.

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And also, can we just appreciate that it's called Scandium? I mean, there's this, these headlines write themselves. They, they really do. And I will just say this much about- The Theranos allegation.

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Theranos didn't have a product.

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Yeah, you- Theranos is, is way more ob- well, maybe it wasn't at the time Well, less obvious and more of just they, they, what they said they were building, they literally didn't build and couldn't- Yeah... build it.

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It wasn't possible. Bloom is building what they're saying they're building. Yeah. So I don't think calling it Theranos is the fairest- Yeah... you know, I don't think that's a very fair accusation.

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And obviously, again, Hunter Brook is shorting the stock, so they're gonna try to make it as apocalyptic as possible.

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The question to me just again resides entirely, are they able to scale to the heights that investors are betting on? So that's, that's why the valuations are so high. They're betting that this company will continue to...

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or, or, or will, will produce up to five gigawatts by 2030. I think that's a fair question. Yeah.

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Calling it Theranos though, when they actually do have the technology, and I, I don't want Bloom to fail, I want them to be honest, the technology sounds really freaking cool. [laughs] Yeah. You know?

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I mean, not turning hy- turning hydrocarbons into electricity without combustion is incredible. But whether or not they can deliver on the full expectations of the market is another question. Yep. We will have to see.

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We'd love to get one of the, the authors of this report and/or someone from Bloom Energy, CEO perhaps, on this pod, but we'll have to wait. The emails are being sent out as we speak.

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Our e- our, our booking minions are running wild trying to acquire more talking heads and experts on this topic. Before we go to our last and final story, Iron, some shareholder pushback against the comp packages,

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All right, Charlie, we going down under? Oh, we're going down under. Okay, so,

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uh, on July 2nd, a compensation package granting Iron Energy co-CEOs William and Daniel Roberts, yes, they're brothers, 18.2 million restricted stock units, which would be worth, at today's valuation, 700 and- between $700 and $800 million was approved.

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This represented roughly a 5% dilution for existing shareholders. A lot of people didn't like this, notably short seller Jim Chanos. Uh,

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so there's been a bit of a backlash and a 10% stock plunge, uh, you know, just pull back. I'll, I'll, I'll say that coincided with a secular pullback in Neoclouds overall.

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And we have now a, a letter from the independent chair of the board, David Bartholomew, um, kind of j- uh, justifying and explaining, "Here's why we did this." Here is the letter.

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Uh, I won't read the whole thing, but the highlights are basically, um, that, uh, the board and the in- this independent chair of the board, uh, Mr.

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David Bar- Bartholomew, has four, has, uh, three arguments for why they ch- the, the board award, uh, chose to award these, uh, these, uh, restricted stock units. So, the first one is that, [clears throat] um,

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this is not the first, uh, uh, award they've given. They granted a smaller one in 2025 at a lower base and deferred the rest. And, uh, this is just because the share price is way, way higher. Uh,

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there's also a fixed share count, not a natural dollar target. Uh, so both Dan and Will, uh, share full downside risk. Um, this is also a time-based and not performance hurdle. Um, this is again, a little bit

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n- uh, nuanced here. Uh, so they claim that because the, the ha- half of the 2025 awards hurdles were cleared too early, that actually, uh, kind of defeated the purpose of them being a multi-year agreement.

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So those were more price-based and these are time-based. And then, uh, this is, these are shares which can't be sold, so they're restricted.

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The, it, it, they, takes them, uh, you know, nine years, between eight and nine years to vest. And the argument is basically that the board wants to save the talent, that the reason that in this

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very competitive AI race, um, you look to people who have a history of successfully executing, and that is one of the scarcest resources. The board believes that the brothers are, uh, very valuable.

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They want to align their incentives long-term and comp them, uh, for what they h- you know, perhaps weren't comped enough previously. They wanna lock them in for a long time. So there are some criticisms to this.

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Uh, Jim Chanos says that, uh, even if the stock halved over the next four years, the brothers would still be sitting on a collective, um, $400 billion with no performance condition attached. So this is just time-based.

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So even if like somehow the-- I- Iron started performing terribly, uh, the-- this is still a massive, massive, well into the nine-figure payout.

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Uh, some people would say that this entrenches them rather than aligns them. And then the dilution math, Colin, is kind of a doozy. It's 5% dilution plus 17% dilution of projected net income through 2030. Uh,

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this is on the back of, you know, huge pay bump, record NBA sponsorship, and, uh, it's... People might say that they're spending

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as if they've already won the race, and, uh, I don't think that's clear. Um, also on dilution...

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Oh, I'm sorry, on governance, while the founders hold just 2.3% equity, uh, they, they still retain 21.8% of the vote in a-- via their dual Class B shares. So combined, they have 44% voting control.

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That expires in 2033, uh, when this final tranche unlocks. So I kind of zoom out really far back, and I interpret this as like how much do you believe in the magic? How much are you like...

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How much do you buy into the Roberts brothers', like, uh, expertise and ability to execute? And, uh, do they really have that je ne sais quoi, that magic to do this? And, and so, um, do you believe in them?

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So it's almost like, like a little bit... Almost like personality or, you know, cult, cult of personality or cult of the mythos, uh, of the, the brothers, uh, driven, if I can

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like really reduce it to, uh- The brothers Roberts off. The brothers Roberts, yeah. So I mean, like how, you know, how much do you wanna-- how much do you wanna bet on them?

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'Cause if you really, really like them and you are one of these Iron iguanas or whatever, whatever animal they are, then maybe you're like, you maybe like this.

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But, uh, my read on social media, again, I'm not really super dialed into Iron Twitter. My read is it's kinda critical, so. Well, and that's what the chairman basically said at the beginning of the letter.

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It's that they view, the board views them as critical to Iron's success. And I would just say Iron

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was almost, I wouldn't say almost dead, but, you know, I was covering stories in 2021 of them having to forfeit, you know, I don't know if it was the majority, but a sizable chunk of their Bitcoin mining fleet because they had defaulted on their ASIC-backed loan- Yeah...

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which they took out at the height of the market. So that was in 2022 that they defaulted. They took out the loan at the height of the Bitcoin market when ASIC prices were sky high in 2021.

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And this is a company that has since gone on to new heights. I mean, I think he said in his letter that Iron eclipsed a $15 billion market cap.

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They're, they're 14 billion right now, so clearly it is, it was the, the, uh, uh, the all-time high had it well above 14.

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And one thing that he points out in this letter is that if you look at other comparable industries, the Roberts brothers didn't actually have a sizable equity stake.

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If, if the math here from Jamie GPT can be trusted, I think e- each brother had roughly 3.9% before these RSUs.

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After these RSUs, assuming they don't sell from, from then on, and, and depending on if they dilute further, which I...

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they probably will, especially if the stock goes up, if they have access to, uh, equity financing at favorable stock prices, they're gonna each have 6.5%.

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I, I would just say, you know, maybe some people are saying that's too much, but for co-founder and co-CEOs, having a sub 10% stake for a stock doing this well, I don't know, man. It doesn't seem too crazy to me.

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I get the headline figure is a lot, and Jim Chamos-- J- uh, Chanos mode wants everyone to think that these companies are just enriching themselves, and no doubt they're making a lot of money.

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But Iron has been one of the most successful, if not the most successful, Bitcoin miner to pivot to AI. I'm not necessarily a fanboy. I don't know if they'll do well in the future.

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I don't know if they'll continue to do well.

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I think there are a lot of questions as to whether or not they should continue the Neocloud model, considering other competitors like CoreWeave and Nebius, according to SemiAnalysis, are leagues ahead of them in terms of performance.

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But the fact of the matter is, they've performed incredibly well.

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And so bumping up their stake in the company to further align them with the success of the company seems pretty procedural to me, and I think it made a lot of noise just because the headline figure was so big.

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But as the chairman points out in this letter, it could be substantially less when these options, or when these stock units actually vest. Because it's a four-year schedule.

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They can't sell for two years once the tranches vest. They've got four 20-- four 25% transing, uh, tran- tranches.

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And so I get why also people were a little concerned about the-- it being time-based and not performance-based.

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But I mean, in, in a way, it's almost the same thing in the sense that, well, uh, th- they obviously want the company to do super well. And if they... They've already hit some incredible performance benchmarks.

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And as he points out in that letter too, they had performance-based compensation in the past, and mar- the market cycle just made it impossible to hit those benchmarks. And I wonder if that's almost the-

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I wonder if this letter almost belies their true confidence in where they're at right now, or where the market's at.

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Because you could almost read that as saying, "Hey, when these vest, we could p- we, we might likely be in a bear market for these stocks after the ebullient 2025 and 2026 phase. We may even be in a recession.

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The market could crash. Who knows?" But the fact of the matter is there's a very high chance that these shares will be worth less when these, when these vest if the market takes a downturn. So...

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I mean, if you, if you co-founded this company and you have that low of an ownership now as it sky- as you, after you, like, literally staved off, like, going under, ah, you pivot at the right time, like, you, you...

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I can get it. You, I see you wanna get paid for the, for the absolute, like, uh, back-against-the-wall pivot execution you did in '23 and '24. Um, so, uh, I think there's arguments to...

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There's, there's a bunch of arguments you made. Uh, this is for the investors to decide. I think that's the whole point. They're like, "Hey, investors, we're gonna do this. We're gonna lock ourselves in.

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Uh, how much do you believe in us?" So, but isn't that the case with, like, every company, every corporate- Yeah... raise on all of these? So this is just, this is just markets, you know? So- Yeah.

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Um- I, I see you've got a very good- [laughs] I didn't know whether to bring this-... a very good read in line... I didn't know whether to bring this up or not. Because you want... You mentioned it.

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Well, I'm gonna d- I'm gonna dunk on people who are mad about this, so go ahead and bring it up. Okay, so this is from last year, last summer, when, um, Dan Roberts bought...

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The headline is, "Dan Roberts bought a $15.5 billion beachfront house." Mind you, that's Australian dollars, so they're just not- Well, that's like-... worth as much. How much is an Australian dollar worth, Charlie?

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Like- I think it's, like-... half... worth, like, 60 to 70% of an American- I know. I'm just-... of a real dollar [laughs] So anyway, [laughs] so, uh, they, he bought, uh, you know,

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eight-figure house, uh, off the coast of Australia, I think near Sydney. Um, anyway, off the coast of Australia, or on the coast of Australia.

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And, um, you know, it's a bungalow, very expensive bungalow, and, uh, people were like, "Oh, he spent all his money on a house." And, um- Hmm... there was a whole hullabaloo about it last summer.

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What do you expect him to do? His company just, like, 10X'd. Yeah. This is why, you know, look, I get it, and I'm not, I'm not usually gonna be one to go to bat for these types of things, but anyone complaining about...

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Like, I guarantee you a lot of the people that got in on Iron early are not complaining about this. Because they made a shit ton of money, too. So I mean, what do you expect? Of course he's gonna do that.

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He's got stock- Yeah, it's like there's other people-... he's gonna, yeah... uh, th- yeah, look, there's other people who, I, I don't... I have the tweets pulled up.

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There's people who bought houses from their hir- Iron investments who are just normal shareholders. So- Yeah... you know, the guy- This-... who actually did it- Yeah... so.

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He executed, he minted a bunch of millionaires in the process, and now he's cashing out some of his stock to buy a nice house. Everyone would do it. Yeah. Literally everyone would do it.

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I think my main criticism, though, is aesthetic. Because what they're doing is knocking down this bungalow and building one of these, like, you know, flat-top, like, more modern bungalow villas. And I, I don't know, man.

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Like- Yeah, that's not it. That- Yeah... that, that, that deserves ire more than, uh- Yeah... you know, breaking news: CEO of wildly successful company- [laughs]... becomes multimillionaire, buys nice house. Yeah. Duh.

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Yeah. You know? Go, go buy that house. Get- Yeah... get that, get that bag, king. Anyway- Haters mad 'cause they can't get that bag. [laughs] Yeah.

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Well, look, it, it- Including me 'cause I'm poor because I didn't buy Iron- Yeah, this is gonna come- So- Yeah, you need to go bet, back against the wall. Bet on, bet on yourself.

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We're going 100X long Blockspace [laughs] when it gonna hits the market. Anyway, thank you so much for listening to Blockspace Live.

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We do this every weekday at 1:00 PM Eastern, featuring quick hits on AI, data centers, emerging markets, tech, and Bitcoin miners. If you like what you hear, you'll love the newsletter, newsletter.blockspace.media.

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And subscribe to the podcast anywhere podcasts are found. This show is presented by CleanSpark, NASDAQ listed ticker CLSK. I'm Charlie. I'm Colin. And we'll see you tomorrow. [upbeat music]