Colin, y'all. Welcome back to Blockspace Live. For a big week, Charlie. Earnings week is kicking off this week here at Blockspace.
We've got the bulk of the companies in our, in our coverage announcing earnings this week and next week.
So for today's show, we're going to kick off with a schedule of what y'all can expect in terms of live streaming earnings calls, content on the live stream unpacking those earnings calls, and executive interviews throughout the week.
Following that, a quick stock market update because Christmas came early, Charlie, and it is green. It is not quite Christmas in July, Christmas in August. Everything's popping right now after a slump in July.
Are we so back? It looks like it, but we're going to dig into the numbers just to show what the rebound is looking like, including some notes from investment banks B. Riley and Rosenblatt.
Following that, we have our first guest on today, Eric Ellingsen of Fortitude, CFO, on to discuss the company's pivot into Zcash mining and whether or not they have AI and HPC aspirations.
And then we will cap off today's stream by bringing back on investor and analyst Ben Pouledan to talk about why CapEx guidance might be a little wonky, considering no one can truly verify the OEM numbers for how much they're pumping out this year.
That's right. Blockspace goes live every weekday at 1:00 p.m. Eastern. We are a compute's daily live show featuring quick hits on AI data centers, emerging technology, and markets.
This week is earnings week, so we are covering all things earnings in NeoCloud's data centers and powered land. We will get into that in just a second.
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More on CleanSpark later on in the show. And guess what, Colin? It is time for the inaugural earnings update.
[beeping] Yes, all hands on deck because we are doing the kickoff for every show this week covering earnings, and this week is a doozy.
I think a lot of people don't actually put, like, earnings on their calendar, so they don't know that, you know, it kinda happens like, "Oh, shoot, uh, earnings are today. I should probably pay attention."
We're covering those. We're gonna give you a forward-looking view into earnings. I've, I've got this little, um, uh, calendar forward-looking chart graphic for this week.
So if you're listening, uh, we're covering earnings week two weeks in a row. This is week one. Um, we do Q2 or whatever quarter it is for the, you know, fiscal year. Cover- coverage for AI data centers and NeoClouds.
We have executive interviews. This week, again, kind of a doozy. Today we have Eric Ellingsen of Fortitude Mining. Tomorrow we have Ionic Digital C-suite CEO or CFO.
Tomor- uh, Wednesday, Patrick Fleury, the CFO of TeraWulf, and Asher Gnutt of Hut 8 on Friday. As far as when the earnings calls are, on Tuesday morning we have Cipher and Hut 8.
Wednesday morning, TeraWulf, Riot, and Galaxy kind of all back-to-back. Early trio of earnings that morning. Thursday in the afternoon, CleanSpark and Mara. And on Friday, Core Scientific.
We'll be streaming the majority of these to our channels.
Make sure to like and subscribe and pay attention to both our X and our YouTube, because depending on the stream clash, we may be streaming one place and not the other. So make sure to check out those.
We will be hosting watch parties for these tickers. Colin. Yeah, a lot of overlap, Charlie. And just to drive that point home, for the times on Tuesday, August 4th, Cipher kicks off at 8:00 a.m.
ET, followed by Hut 8 at 8:30. On the 5th, on Wednesday, Wulf at 8:00 a.m., and then Galaxy and Riot conflicting at 8:30 a.m. all times ET. On Thursday, we have CleanSpark's earnings at 4:30 p.m.
ET, right after market close, followed by Mara at 5:00 p.m. ET. And so far, nothing on Friday. So keep an eye out. As Charlie said, on our-- for our X and YouTube, we will be streaming these live.
We will also unpack the earnings every day on the stream. For Tuesday, we will tackle Cipher and Hut 8, come out same day. Wednesday, we will tackle Wulf, Galaxy, and Riot.
Thursday, we will be taking a breather because there's nothing coming out that morning and nothing at market close on Wednesday.
But on Friday, we will be hitting the ground running with CleanSpark and Mara's earnings as well.
And as Charlie said, we have those interviews lined up with Patrick Fleury and Asher Gnutt, so keep an eye out for those throughout the week. Muted. Charlie. And this is just week one.
Uh, we d- we haven't, uh, rolled out, we haven't pushed week two yet, but there's a lot coming out. Week two is also very big, uh, interviews, and live streams, and earnings calls.
So that is to say, it's a particularly exciting earnings week, Colin, because the market's ripping. And-
Where better- It is ripping Where better else to go to see what is happening in the market than DiMetrix or DI Metrix? What's in our stockings this morning, Charlie?
What, what pumps have we, have the little, uh, market elves left us last night? So pretty much everything. Everything is green. Um, it's not quite the rip that we saw on Friday after Leopold got liquidated. Um, but to...
I mean, if we just look at the power shells, Marah, Right, CleanSpark. Let me actually sort these by, um...
Yeah, I mean, Marah, Right, CleanSpark, Core, Wolf, Cipher, Hut, Bitdeer, Hive, Apply Digital, Soluna, Big Digital Energy.
Every single thing is up from anywhere from 2.3%, um, Hive, um, Hut 1.6%, all the way up to Cipher at 9.4% up on the day. Uh, really pretty wild here to see, uh, earnings week,
uh, kick off to such a strong start. If we wanna go down to the Neoclouds, this is where some of the numbers get even crazier. Leading the pack this morning, CoreWeave up 15.7%, Nevius up 14.2%, Iron 7.2%.
So, uh, and then the rest of the sector, you know, DGX, SHAZ, Whi- W- uh, White Fiber, uh, all of these up, um, you know, one to 8%. So strong start to the week.
Uh, maybe, maybe that means that all of the earnings are going to be pretty positive. You know, who knows? So toss it to you.
Yeah, so a huge rebound, and this is a totally unverified report from Kalshi Finance, but I just have to get it up here because I feel like it's notable given the rebound.
According to this tweet, hedge funds just bought tech stocks at the fastest pace since 2022.
So if you're wondering what is behind this rally, you can thank Citadel for buying the book off of Leopold and the ensuing rush of, of liquidity into the system.
I'm not sure how true this is because if you look back into July, there is this Goldman Sachs report that says, f- and this is from Bloomberg via Yahoo Finance, "Goldman says hedge funds sell US tech stocks at record pace."
Now, this is at the end of July when everything was getting absolutely hammered. It's possible that they're rotating back in now that evaluations have become a little less dear.
But needless to say, it's just an absolutely absurd rebound. We covered this on the stream last week when we touched on some of the earnings. Microsoft up
like 15% after it shattered Q2 expectations, versus Meta, which was down about 8 to 9% following its earnings miss. And then you also had Amazon beat on its cloud segment as did Microsoft.
New all-time highs for Amazon, a $3 trillion company as of this morning. I think, what is it? There's five $3 trillion companies, so Amazon joins that pack. Yeah, that's...
If you look at the charts, it's kind of incredible 'cause it's just a cliff, like it gaps all the way up for Amazon and for Microsoft. And we covered some of those Mag Seven earnings last week.
They're not our primary beat, obviously, so we don't put too much attention to those. But needless to say, what we're starting to see... Yeah, I mean, just look at that chart. That's, that's,
that's insane price action for a $3 trillion company. Amazon up 4.5%. I mean, this is a $3 trillion company market cap, three and some odd trillion, uh, h- up big right at the open of the day.
So- And, and the takeaway for me last week, Charlie, was looking at some of these earnings reports from the big dogs.
It's that investors are starting to really ask what the feasible ROI will be for all this CapEx that they're spending.
If you looked at Meta, they had an earnings miss even though they had a revenue beat, but their CapEx guidance was nudged upwards by about five to 10 billion for the full year 2026.
Microsoft, on the other hand, had as your, its Azure cloud business line completely destroy expectations, over 30% increase in revenue, and its CapEx guidance fell, but that was just some accounting shifting.
They basically took it from, um, the capital expense bucket into another operating cost bucket. But we're-- I do think that we have moved on to a new, a, a, an...
We've moved on to a new phase in the market where announcing the deals isn't enough to move the needle. We saw this recently with Core Scientific and CleanSpark.
They had two banner AI deals inked, and the stocks did not really move as aggressively as we saw in year, i- in the months prior and in last year when a lot of these deals were fresh.
I mean, y- you say that, but, uh, and maybe the market was just a little cautious at the time because Korea was driving the market, whatever. Maybe Iran was back on the front of everybody's minds.
Perhaps people are thinking that things are over-leveraged. But at the same time, I mean, look, this morning, again, you said B. Riley lifted CleanSpark to a $26 price target. What is it right now?
It's, uh, that's over, it's, uh, over double, so it's at 14 right now. So it's basically 90% upside target. You have B. Riley also raising the Terawulf price target to 40, so which is 124% upside. Um,
uh- I'm glad you, you mentioned this, Charlie, 'cause it's a good segue into some of these notes coming out before earnings, which we'll go ahead and tackle. Now, caveat here.
Whenever you see these, these investment bank reports, they're almost always on the sell side, so they're going to try to have higher price targets because they have a financial stake here.
Yeah, they're trying to sell you the stock, but maybe they're right. [chuckles] Yeah. Maybe they're, maybe they are right, and if you look at some of these in 2025, they would've been vindicated, right?
Because a lot of those stocks ended up soaring. But we'll start with CleanSpark here really quickly. This is coming to y'all from Blockspace. And per what Charlie just said, B.
Riley raising its price target from nineteen to twenty-six. This was on Friday.
It maintained a buy rating, and the target is an eighty-one point three percent upside from the closing price early Monday of fourteen dollars and thirty-four cents per share.
What's driving this is not the Sandersville deal, though. B. Riley is arriving at this price target based on its assets in Texas, CleanSpark's two data centers in Texas.
The Sealy campus, they've assigned an additional HPC value to the Sealy campus of three point eight nine billion and seven point zero two billion to the Brazoria County campus. Those figures use a fourteen x
multiple to, um, to the, uh, uh, uh, excuse me. Those deals use fourteen times modeled NOI below the multiple assigned to the Sandersville deal that they model in this, uh, research note as well.
And, um, they are discounting, uh, capital expenditure estimates of about two point five nine billion for Sealy and five point four nine-- or four six billion for Brazoria.
They also have this note out on Wolf, which is a little scanter in terms of looking at potential, uh, you know, potential future HPC revenue.
But they did raise their price target from thirty-two to forty and remain, uh, remaining with a buy rating.
Um, the eight percent increase lifted the bank's target by twenty-five percent, and the new target applies about a hundred and twenty-four percent upside from the reference p- uh, rate when we wrote this article.
And this comes on the heels of TerraWolf's July sixth announcement for the twenty-year lease with Anthropic at its justified data center in Hawesville, Kentucky.
That's a nineteen billion dollar deal over about four hundred and one megawatts of critical IT load. There's also a note out on Galaxy, which we don't have up on the site right now. But
the note itself comes from Rosenblatt, and they are maintaining a buy rating, but they are cutting the price target. Price target went from thirty-nine to thirty-five.
Current price for Galaxy is about twenty-one dollars per share, and the price target cut is valuation me-mechanics driven.
Rosenblatt is applying a twenty-three X multiple to a lowered twenty twenty-eight adjusted EBITDA estimate for Galaxy, which is-- it conflicts with a peer average of about eighteen X.
And this is largely driven by the HPC hosting mix from Galaxy. As y'all might recall, they have their CoreWeave deal, but they also have added a second site in McGregor, Texas,
originally specced for twenty-four megawatts, so they can be under that batch cero threshold there in ERCOT. But they have aspirations to scale up to three hundred megawatts at that site.
What was interesting to me, Charlie, with this Rosenblatt note with Galaxy, though, is they basically reset all of their valuation metrics for the company or their estimates, and they didn't really trim them as much as they totally revamped them.
So Q2 2026 revenue, they dropped their estimate from eleven point zero eight billion to seven point three seven billion.
Fiscal year, uh, full year 2026 revenue, they estimated at thirty-one point two five billion, down from forty-nine billion.
For the fiscal year 2027 end, they have the target of thirty-one point four three billion versus sixty-five point eight four billion for, for the, uh, previous estimate as well.
They also adjusted EBITDA down pretty significantly, including flipping EBITDA negative for the full year of 2026, down from seventy-three point one million to minus three hundred thousand.
I would imagine a lot of that is
them taking into account the hammering that the crypto market is having currently, 'cause Galaxy still has a lot of hands, not just within the HPC business, but within the realm of crypto financial services as well.
So... Yep. Um, we are gonna keep on going. We have DeepSeek in Mongolia. Fun little story this morning. Get to talk about, uh, the landscape of is Mongolia the, the Texas of Asia?
Uh, more on that after 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. You are-- You, you're muted. Thank you, Charlie.
As you said, this one's a fun story. Coming at y'all from Blockspace by way of Bloomberg and the Japanese Times.
I believe the Japanese Times prob-- or Japan Times probably reported it first, and then Bloomberg did supplementary reporting.
But that is DeepSeek targeting one gigawatt of AI data center expansion in Inner Mongolia, a region that old head Bitcoin miners will remember from the heady days of China's mining dominance.
We'll get into as-- We'll get into some of the numbers as to why that's happening. The region is very coal-rich and one of the, uh, electricity generating powerhouses for mainland China.
But this is coming to y'all from Will Foxley here at Blockspace.
Article says here, quote, "DeepSeek is planning roughly one gigawatt of computing capacity in Ulanqab, Inner Mongolia, through a combination of company-owned infrastructure and capacity leased from other operators.
The Hangzhou-based AI startup wants at least part of the capacity operating by the end of 2027," so they must have just gotten started recently, "or early twen-2028, according to reports from Bloomberg's and the Japan Times."
Notably, Charlie, the chip configuration has not been identified, and we covered stories of, or a Bloomberg report last week that ins-insinuated that Moonshot, the company behind Kimi K3, was actually using roughly 20K NVIDIA Hopper
generation chips from Alibaba for the Kimi K3 model, and this ran afoul into a bunch of [tsks] regulations and export controls that the US currently has over leading-generation NVIDIA chips to Chinese companies.
As we covered on the stream, there are a few workarounds.
Chinese companies can rent capacity outside of China for these leading-generation chips, but they're not allowed to have the bleeding-edge NVIDIA chips for training or for inference for their AI in their own warehouses, in their own data centers.
And so the question for this then becomes, what is DeepSeek going to use?
And of course, the reporting was scant here because I don't think this is going to be something that you can just finagle out of sourcing very easily.
[sniffs] But the, uh, the question is whether or not they're going to use Huawei's Ascend line, which is China's leading domestic alternative, or stick with NVIDIA. Um,
DeepSeek has used Huawei in the past, but early reporting indicated that it ran into difficulties training on Huawei Silicon and has continued to lean on NVIDIA systems.
The chip mix, again, for the one gigawatt build-out has not been disclosed, so there's some tension here between regional and domestic.
Charlie, I'll toss it to you before we get into some of the rationale for why Inner Mongolia has been ch-chosen for this gigawatt build-out.
Um, yeah, and I'll chime in on that too, but, um, I think some context is important. So DeepSeek, from which the term DeepSeek moment, the industry reckoning, what, 18 months or so ago.
Um, DeepSeek wa- is vertically integrating. Now, this was a company, a Chinese near-frontier model company, who made its name on being like the efficient model, the, the token-efficient model. Super, super cheap.
You could basically buy your intelligence and inference, uh, just for pennies on the dollar compared to other, uh, providers.
Uh, so and that's because they kind of supposedly trained their model on a shoestring budget, but now they're going full integration, so this is a, a, a very CapEx-heavy decision, as we assume.
Uh, and, uh, it does challenge this narrative that DeepSeek almost kind of created 18 months ago, which is, you don't need massive compute.
And that had caused like a tanking of the industry, NVIDIA and others, for like a week or two, which was quickly rebounded back.
But basically, DeepSeek, the company who once challenged the idea or caused the industry to wonder if the idea that we need large compute and large CapEx, um, is now leaning into this.
So, uh, this is kind of a reversal, an acknowledgment, an admission, uh, through co-corporate strategy and announcements that, uh, yeah, everybody short compute, including the company who everybody thought demonstrated that we didn't need as much compute.
So I'll toss it back to you to talk about Inner Mongolia. I have a map pulled up if you want, uh- Yeah, can you go ahead and toss that up here? Yeah, 'cause this is really-- I think this is helpful for people. Um,
Inner Mongolia is not the country of Mongolia. It's the province of China, like a large state. The province of Inner Mongolia, which is the large province in northern China, which borders Mongolia.
I call it, I think, maybe thinking of it like the Texas of China may be kind of accurate in that it's sparsely populated, it's resource dense, and it has tons of power distribution and power generation-related resources.
To you. Yeah.
Yeah, it's about 350 kilometers northwest of Beijing, so it'll be just close enough, a little bit further out maybe than you'd want, but it'll be close enough to service computing needs for that city center.
[tsks] And it has a naturally cooler climate that makes it beneficial for running these data centers, and it is flush with coal. So much so that there's a crowded field of companies in there.
Alibaba, UCloud, VNet Group, Zhonglian Data have all set up projects there, and now DeepSeek moving in.
[tsks] Um, Bloomberg reports Inner Mongolia as a whole had 28 large/medium computing and data center projects under construction or renovation in H1 2026, totaling an estimated 117.6 billion renminbi in investment.
[sniffs] And a June 25 regional disclosure had already pegged this area that DeepSeek is moving into at 66 major computing projects with 71,000 petaFLOPS of aggregate capacity, over 90% AI related, with DeepSeek by Dance and JD.com workloads already running there.
So the reason why all of these companies are flocking to Inner Mongolia is because it is a electricity-generating powerhouse for China. Total installed ca- power capacity [tsks] is estimated at 240 million kilowatts.
That's 240 gigawatts, which is the largest of any Chinese province. Coal makes up the lion's share of- Of aggregate megawatt hours produced, it's 117 gigawatts of the whole- of the nameplate load.
But in 2025, coal-fired p- powered plants produced 590 billion kilowatt hours versus solar and wind, which generated about half that at 277 billion.
And this despite the fact that solar and wind actually make up a decent chunk, about 120 gigawatts of the nameplate power in the region, but they're intermittent, so you don't get all of that power obviously.
I mean, it's Mongolia. It's the steppes, the windy steppes of Mongolia. Of course there's wind. Yeah.
I mean, so they've got a bunch of wind there, they got a bunch of solar there, but the coal base load is the thing that will really make this region shine for AI data center development.
In fact, Inner Mongolia is the key node in China's West to East Power Transmission Project. In 2025, roughly 40% of its generation was exported to other provinces.
So there is a bumper crop of electrons in this area, and now that will go towards these AI data centers that are setting up shop there.
The coal reserves in the region total roughly 536.5 billion tons, which is nearly a third of China's national total.
So the fuel security in the region is very, very strong, and they're [laughs] not going to run out of any raw materials for producing this. Or sorry, they're not gonna run out of fuel anytime soon for these data centers.
And, you know, as, uh, we- I touched on at the beginning, Charlie, Inner Mongolia was one of the bedrocks of Bitcoin mining when Bitcoin miners still used to be dominant in China.
In fact, that's where most of the miners still are. The ones that are left in the nation are concentrated in this region because it is so flush with power.
So we'll see how long they stay with all of the AI data centers starting to come in and crowd the trade for energy. Yeah. I'll repackage a bit of what you said.
Basically, um, if we want to compare, uh, West Texas, like ERCOT interconnection queues with Inner Mongolia, um, also the way to pronounce that city is Ulanqab. I had to look it up real quick. Thank you. Ulanqab.
Um, the distance from this, uh, base load that DeepSeek is looking at to, say, a major hub like Beijing, um, the distance is roughly the same distance as Abilene, Texas to Dallas, Texas, just for like a little, like, you know, visual, uh, and geographical comparison.
The difference though, between Inner Mongolia and Texas, is that while Texas has huge demand, it, it means large and long interconnection queues.
May not be the same case with Inner Mongolia in that they already have a lot of the installed capacity, just because, for whatever reason, China likes to, as a command economy, build a lot of things, and, uh, in this case, it may actually work out pretty well for them.
Um, I know that some pe- some folks may say, "Oh, this is green computing," because it... You know, there's a lot of installed wind capacity in Inner Mongolia. I don't know if I think that's entirely true.
As you said, Colin, this is gonna be a coal-powered, uh, energy mix. Yeah. The people who fawn over China as some poster child of the Green Revolution are just deluding themselves.
'Cause they'll point to charts that show how much solar and wind they're building, which is true. But if you look at- They've got, they've got, they've got solar, you know, covering mountains and everything, but- Yeah...
it's not connected to anything, and it- Yeah. It's not connected to anything. And also, if you look at how much coal they're building, it dwarfs the green generation that they're rolling out.
Also, China's not doing this out of the goodness of their heart, or I should say Beijing, the CCP are not doing this.
They're doing it because they produce all the world's solar panels, and they subsidize that production. They have a lot left over, so they're just gonna deploy it for their own use cases. So. All right.
We h- we have Eric Ellingsen of Fortitude in the wings. We'll bring him on up here shortly after a word from our sponsor, Luxur.
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If you'd like to learn more, go to luxur.tech/commander to get started. All righty, Charlie, let's get Eric Ellingsen, CFO of Fortitude, on the stage. Eric, welcome to the show, sir. How you doing? I'm doing well.
Doing well. Thanks, Colin, Charlie. Good to spend time with both of you guys. Appreciate you having me on today. Yeah. Appreciate you taking the time, man. It's, uh, been a long time coming. We've been- [laughs]...
covering Fortitude on the, on the website for quite some time after it was spun off from Foundry, started getting its own footing.
So this was a great opportunity for an update on some of the stuff y'all are planning, especially with this merger that y'all are doing with Heart Sciences for a public listing, and I think that's a good place to start.
What's driving this decision, and what is the market appetite right now for a crypto mining equity when most of the sector is pivoting towards AI? I, I think that's probably forced- Oh...
first and foremost on, in investors' minds. Is... And also, if you can give a rough timeline for when y'all think this will be completed. Absolutely. No, again, good to be here.
And, uh, yeah, excited to talk about the transaction.
So not unlike some of our mining brethren before us, uh, we are looking at a reverse takeover transaction with Heart Sciences, ticker symbol HSCS, as a vehicle for us to enter the public markets.
I think, you know, why was kind of a very specific question from you, Colin, on, on why is kind of now the right time relative to appetite for the market considering mining companies.
Um, from our perspective, and, and Barry talks about this often across podcasts and, and Twitter, he likes to zig when others are zagging, right?
And so as folks are leaving a market, we see a gap in the space for us to enter from a mining perspective.
And I think we think about mining a little bit differently than some of the larger folks that have been in the space for an extended period of time.
We're focused primarily on Zcash, and so the mining economics of Zcash look very similar to that of really early days Bitcoin mining. And so when you think about, you know...
And I wanna talk mining holistically across the space as opposed to talking about kind of our financials specifically. But if you take a look, Zcash Info is a great resource by one of our sister companies, Foundry.
But if you take a look at Zcash Info, you could see some of the very specific economics tied to mining Zcash.
And at 80-plus percent margins on any given day for the Z15 Pro, it's a really, it's a really attractive time for us to be mining the Zcash token.
And as you think about kind of the profile of a mining company over the longer term, there's a need for power assets and there's a significant need to purchase ASICs. And appreciate you bringing that up, too, Charlie.
Then there's a need to purchase ASICs and mining equipment as well, right?
And so if you go to the miner tab in particular, you can see the profitability of some of the units kind of directly with the Z15 Pro being at the top of the page.
So as, you know, as we speak, that 10 cent power cost, which he has listed as the electricity rate above, we're still right at close to 80% mining margins.
And of course, we're at something less than 10% today in our power cost, and we've guided in our investor relations deck is bringing our cost to mine a Zcash token down from $70 to $40.
So a little bit of a long-winded answer on the front end, but I think economics are the reason why. And then why, why enter the public markets? Fundamentally, it's, it's, it's a capital to growth story for us.
I'm glad you talked about the economics, 'cause that was actually gonna be my next question.
When you look at a company's decision to go for something like Zcash versus Bitcoin mining, that's the first thing that comes up.
And have, have y'all done numbers on Bitcoin recently in terms of what the margins are similarly for, like, new hardware, just to give y- listeners a p- uh, kind of a, you know, perspective there? Yeah.
Margins in the Bitcoin space are, depending on power cost, anywhere between 10 and 30% kind of contribution or gross mining margins.
And as mentioned, Zcash is in that, kind of depending on your power cost, between 80 and 90% contribution or gross mining margins, depending again on, on the underlying power cost of the business.
And that 80% was based on, uh, 10 cent power, and I believe on one of Fortitude's press releases, y'all are coming in somewhere around 4 cents a kilowatt hour. Am, am I correct about that? You are.
So we're in b- we're in that four to five cent range, um, and that's, that's based on kind of the hub that we're building in real time in Nebraska.
So we were super excited to announce a recent greenfield site, um, that we energized in Grand Island, Nebraska, and we had purchased earlier this year another site in Aurora, Nebraska, and we're working, uh, to kind of build a hub outside of, again, kind of that theme of zigging while others are zagging in terms of being outside of, of Texas in some less crowded markets that are still kind of very open to an interruptible rate, which fundamentally is the thesis behind all, all crypto mining.
C- can you kind of speak to that hunt for power a little bit, Eric, i- in the sense that you said you're kind of looking outside of some of the more crowded markets?
I mean, what, what, what is the, what is the edge that crypto miners are looking for right now to secure power in such a constrained environment with all of these data centers gobbling up every electron they can find?
Yeah. [laughs] Um, the edge and the differentiating factor for crypto versus the kind of reliable, redundant load required in the AI HPC space
is our flexibility and be able to kind of, you know, shut off and, and curtail when the market requires.
And so that continues to be a theme in both Bitcoin and kind of all of, all of crypto mining, including Zcash as well. And so others are looking, again, for that stable, reliable load, and even redundancy tied to it.
So a lot of, again, a lo- a lot of the larger miners that are pivoting in real time are looking to purchase, right, cogen sets and things like that, that are gonna add redundancy to their grid-connected power today, whereby we're, we're, we're comfortable working directly with the utility to, to put in place a curtailment strategy.
I think the other theme is we're working to find and fill kind of smaller pockets of power.
If you ask specifically kind of outside of the ERCOT grid in, in particular, I think there are agrarian economies across the Midwest that have power infrastructure that supports really kind of twice per year use, and that's harvest season and plant season, again, for a lot of the agrarian economy.
That infrastructure is there and primed to be coupled with, you know, all of crypto mining. So, um, I'm curious specifically about this Grand Island site. And, um, you know,
so the curtailment piece seems to have been pretty big about coming into this area and saying, "Hey, we're not going to drive up power costs.
We're going to make sure that we're shutting off when appropriate," and n- kind of dispelling fears of, of these data centers- Yeah... driving up costs. Yeah. I'm curious, um,
at, uh, I'm curious with regards to some of the moratorium pushback that we've seen in certain jurisdictions and localities. How much of that is- impeding or helping with Fortitude's ability to procure, procure power?
Specifically from the standpoint of, it seems like- Um... most of the hire is directed towards the AI data centers, and there might be a case for crypto miners with that curtailment piece to kind of duck that entirely.
So making it easier, say, "Hey, we're not the same as these guys." Does it make it just a little bit harder considering there is more scrutiny on any power use? What have y'all found? Yeah. I think, um,
this is such a cop-out answer, but it's on a case-by-case basis, Colin.
And, and what I mean by kinda case-by-case basis is if people are willing to listen and understand the nature of the load that we're utilizing, like Ryan Schmitz did specifically at Grand Island, right?
He got on, um, you know, on, on the local news to talk about how this is a great thing for the local economy, and an ability for them to bring in additional revenue and utilize power infrastructure that, again, is only utilized on a couple occasions per year.
So the interruptible load and contract that we signed with the folks in Grand Island, we're, we're really excited about working with, with Ryan and team at GIUD and Grand Island to, to, to build that infrastructure, and now energize that particular infrastructure.
So I think if folks are willing to listen to the benefit that we can bring to the grid and the additional revenue that can be generated for that local economy, not only it's us hiring people, but there's a, there's a construction component to what we were doing in addition to paying for power costs that's supporting, you know, Grand Island and the Grand Island community.
So, um, for folks that are willing to listen, you know, we're willing to partner with everybody from, you know, independent power producers and IPPs across, you know, all the way down to, uh, kind of the local co-ops that, that, that, that wanna provide us, you know, smaller loads.
I'll, uh, throw out kind of a wrapping up question, which is obviously it's case by case. Uh, and- Yeah... and you've, again, zigged when others have zagged.
But does Fortitude have any plans to pursue AI HPC co-location at all? Can you speak to this at all? Um, Charlie, we're not, we're not right now. Um, so I think, you know, it's a never say never mentality, right?
I think when we, when we talk about our business, and one of the cool themes and the, one of the reasons I joined, you know, less than, a little less than a year and a half ago now, was this mindset of being a returns maximalist.
And so I think the team at DCG and, and us at Fortitude are always open to ideas, um, and wanna take that kind of return-on-investor capital mindset first.
And if that, over the long term, means that we're gonna explore opportunities, I think the group would be open to it. Awesome. Eric, thank you so much for joining, man.
Really appreciate the time, and, uh, we'll have y'all back on as things start to develop for Fortitude. Appreciate it.
Yeah, exciting times ahead of us too, so excited to come back on and, and keep you guys abreast of everything we're working on. Thanks, Colin. Thanks, thanks, Charlie. Appreciate the time. Thank you, Eric. Cheers.
Love that guy. Love a curve ball, uh, mining strategy. Um, very compelling. Uh, we are gonna keep on rolling. We have Ben in the audience.
We're gonna bring him on, up here in a moment to talk about chips and what it means for AMD's new chip in his letter that he put out this morning. Before that, a word from our sponsor, Ligos.
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Go to ligos.finance to learn more. All right, we got Ben Paladian in the wings. We're gonna bring him up here again. Gonna run it back. Ben, welcome back to the show. Running it back. Welcome. Good.
Glad to be back with you guys. I missed you guys over the weekend, and I'm, I'm happy to be here again. [laughs] Yeah, and you were busy over the weekend. I mean, you went, uh...
You were type- fiercely typing up this, uh, letter to AMD CEO Lisa Su, um, which I wanna focus on. Like, I was reading through this.
Again, had to use the, all the LMS at my disposal to, uh, get, catch up on, uh, chip architecture. But I think I'm down...
And this is, uh, v- very interesting because there's, you say there's about half a trillion, uh, in CapEx, in AI data center spend allocated based upon self-refor- self-reported, unverified vendor benchmarks,
and you have some open questions. So give me the TLDR of, like, your takeaways from the AMD, uh, conference and presentation, and the overall thesis of, like, what you wanna find out. Yeah.
Basically, I'm a, I'm, I'm a pretty well-known Nvidia shareholder.
So I was at the A- AMD AI event a few weeks ago in San Francisco, and then they put on the screen that their CPU's, you know, 20% better than Vera, Nvidia Vera CPU on single-core performance.
And I was like, "Hmm, okay, like- Let's bring the competition back because, uh, you know, back in the '90s and 2000s, it was always Intel versus AMD on the CPU stuff.
Now on the AI data center front, I think it's Nvidia versus AMD on the CPU. So I went through their whole deck to see, like, what they were talking about, and then I couldn't find the chip that they were talking about.
There was no model number, no wattage, no price, and it's not even on their price list. And then this Tom's Hardware also said the same thing, that this, this chip doesn't exist. So I was like, you know what?
Like, this is something important. I, I reached out to a few friends in the industry and I said like, "Am I like, like making sense here? Um, or am I seeing things?"
He's like, "No, you're right, Ben, like this isn't anywhere." So I said, "You know what? They're reporting earnings on Tuesday, let me
use my social media and, and, uh, publish a letter to see if she can, uh, respond and see what it is." I'm, I'm just open to the discussion. I just...
When people put up these slides of all these footnotes, I just want people to back it up with, like, real data.
'Cause when I ran my LED lighting company, we, we submitted everything to, like, a third-party, uh, testing agent, uh, place, and they would measure lumens per watt.
And then this, and then in this particular, uh, case, they're like fudging the, the wattage number in different areas to kind of, uh, make their performance look better or worse and, or changing the metrics, and it's, it's a little weird.
Uh, and in this era, like, yeah, spending half a trillion dollars, you wanna know what the apples to apples comparison are because every, every watt matters in a data center 'cause you're so power constrained.
And, and that gets into, you put out four questions for Doc- CEO Dr. Lisa Su, hopefully maybe to answer or shed light on this tomorrow. AMD earnings call tomorrow, so we'll, maybe we'll get some answers.
But, um, lay this out for me. Um, what's...
You know, dive a little bit deeper into this, um, and I don't know if I'd call it like the mystery chip, but, like, we don't have the hard, we don't have the hard data is, is basic- is basically the point. Um,
what do you think the chip is, uh, but, like, what do we not know about it? Maybe this chip doesn't exist.
So if it doesn't exist, like, tell us, like, what's closest to it or map it out for us so we can kinda understand. Don't
have people go through all these, like, tiny footnotes like in a maze to kinda try to figure out what this product is and, but make the claim that you're 20% better than Nvidia, right?
'Cause Nvidia's also built a heritage of CPUs which people don't know about. Grace Hopper was the first CPU that they worked on, but they didn't really market it m- 'cause the whole,
uh, AI revolution, if you, if you look at all the things that Jensen has been talking about all these years, it's like the CPU is dead. Moore's Law is dead. Long live the GPU. But in reality, you need both to coexist.
You need the CPU to kinda tell the GPU, uh, the GPUs what to do and have that orchestration to work together. And the question is, is like which one is better and which one has higher performance? And,
uh, if you go back, back in time, like, like in, like I said, the late '90s or early 2000s, it was always, like, AMD versus Intel on which CPU is better on performance and megahertz and all those things.
And I think now we're back to that rivalry again between these two companies, uh, which is exciting because I think, uh, rivalries create better performance and you, uh, it serves the customers better in that aspect.
And this gets into kind of like a standard reporting discrepancy. You talk about, like, this, um, inconsistent denominators when reporting chip performance.
And this extends also, I believe, to, uh, Nvidia in that there's some in... Like, it's not... The, the, we just, it's very difficult to compare apples to apples when comparing, uh, the performance of these chips.
Um, I guess what does this mean at the data center level?
Because most of the, our audience is, like, power acquisition, power deals, but that's downstream of this, like, very, very, very different business of, like, chip stats.
Yeah, 'cause they pushed- What does it mean, like, in the data center? They pushed, they pushed 600 watts on throughput and then 400 watts on agents per watt, but there's, like, no wattage for the single core.
So, like, obviously if you're supposedly saying you're using less watts and out- outputting more, then you're better than the other guy. But what if you're actually using more watts but not, and hiding it, right?
And that, I think that, uh, for, like, a data center designer or owner,
the, that leak, that wattage leakage, right, can negatively reflect our pro- affect our profitability because our energy costs go up and they don't have enough power.
I think that's what people really need to understand is we're super power constrained, and every watt matters, and that needs to be accounted for on the specs of your products.
I mean, does, does, does, does this, this have the potential to derail, you know, uh, the expansion plans some of these companies have? I'm thinking about even just modeling out CapEx.
If the wattage isn't totally aligned with what you're expecting to spec for your data center, that could cause some kinks in the road.
Do you think that's a legitimate issue for some of these operators, or do you think- It is because, uh, when you're talking about, like, rack-scale deployments, you have, like, one rack times, like, 1,000 or whatever is in the data center.
So all these things multiply and scale. So the question is, is, like, what is it?
I need to know that number and that performance because I'm designing this data center that's gonna ba- basically be built in a year and a half based on your specs today.
And the, the load and the wattage and the power supply and everything, everything has to kind of match up.
If not- You're putting the, the operator in a bad position 'cause they end up deploying it, and then it's gonna co- end up costing more than what they actually thought it was gonna be.
And then, like, you're negative on your margins. [laughs] So AMD reports tomorrow. Yeah. Um, do you expect them to answer or clarify anything r- regarding this chip? I mean, you've got four questions.
You know, publish the sub scores of the chips, you know, unify denominators, um, maybe tell us what chip or, you know, whatever. Do you expect them to maybe address any of these open questions that you have?
And then if they do, uh, to what degree does that a- add, like, give investors clarity going forward? I'll be listening. Uh, and recently I've, I've, I've had an influx of AMD employees start following me on X right now.
They're all in these different departments coming out of the, the woodwork, so it's, it's definitely making the rounds, I think, around San Jose and Silicon Valley.
It's a good question, and people, when they work hard on these products and these different groups and it, it, it's a lot of data and numbers. Like,
at the end of the day, you want an apples-to-apples comparison on what you're, you're up against, and if you're kind of moving the target or the denominator to make yourself look better, and 20% is a big number for these types of things, it, it kind of discourages you.
So how do we level the playing field for everybody to kind of play nice? Like, I have nothing against Lisa Su or AMD. I love it.
I also had a question for Nvidia to talk about their memory and architecture, what they're doing. Everyone needs to kind of contribute for this to work in this ecosystem because,
uh, the way I look at it is, uh, you know, we're all on the same team.
It's us against China at this point, so we all need to win, and let's make sure the people buying these products are also winning and getting the right product that they were looking for.
I think that's the most important. You bring up the-- You referenced, like, the Intel-AMD CPU, uh, race of before my time. And- Yeah, I'm kind of old, I guess. [laughs] Yeah.
And, uh, and you call this, quote, "the best CPU race in a decade." Um, you know, what are your thoughts on x86 holding the data center crown?
Um, do we see Vera at the beginning of the Arm takeover for, you know, hosting these nodes? Uh, I don't know. Give, give you some color on what we can look forward to for this competition. Yeah, I mean,
the, the whole x86, uh, thing sort of died. I think you can also look at what Apple did with the-- they designed Intel out of their MacBook.
So like every, pretty much every new MacBook has Apple silicon in it with their own cores, and it's, it's all Arm-based.
Nvidia did the same thing, and now with, uh, agentic AI, you have Arm, who-- which came out with its own AI CPU, and then AMD supposedly has three different CPUs, and then Intel, this whole run-up that you see in the stock prices, they're, they're able to charge more for CPUs because there's so much demand in that.
But the question is, is just throwing more CPUs at the, the problem might not be it. The question is, how do you design the CPU to be more, the most performant in an agentic long-horizon task workload for AI?
And to really do that, I think you need to have the roadmap to make it purpose-built.
That's why, not to be conflicted, but I think Vera Rubin was designed for that, and the roadmap that Nvidia has for their CPU products, I think, is well-versed for long-horizon agentic task loads, and I think that's where it's headed with that.
And then they-- I think they shrink that to some extent, and they put it into the, the, the RTX, uh, personal computer that's coming out or f- for, for enterprises and offices.
And I think once you create that, like, scalable solution, you kind of see all that working. And then this is just my, uh, like, hypothesis. Sometimes, uh, you just have to kind of
think outside the box and dream a little bit. I think these CPUs and these Vera CPUs, right now they're orchestrating virtual agents or, like, basically, like, LLMs to do things.
Eventually, these CPUs will be orchestrating physical AI, which is like robots. So the, the agentic, uh, like, the robots are basically running loops for you, say on, in a manufacturing floor.
Like, pick up this widget, drill it in, test it, close it. Like, that's a loop, right? And you need a CPU to orchestrate that. Like, like a master computer with all these robots running in concert as a robot.
How do you-- Who's doing that operation and who's running it? I mean, I, I think that's like another Nvidia type of play.
And that kind of becomes, uh-- A lot of this is focused around memory and where this memory sits on the GPU and the chip. Um,
and this may not be, like, the best closing question, but you talk a little bit about memory power and how this is kind of, uh, obscured, like the LPDDR5X versus, like, an unpublished MRDIMM figure.
Like, th-- I'm still trying to wrap my head around this, um, but the-- a- as, as, like, context becomes king here or, and, and maybe, I don't know if you dis- if you agree with that.
As context often kind of becomes king for these long-horizon tasks, like, memory power becomes very important.
Um, give me some color as to, like, what we could hope to see in the memory, like, stats game, especially with regards to power draw.
Um, and, you know, hopefully, uh, can we expect it to be more standardized and transparent to perhaps incentivize a little more competition? I don't know. What are your thoughts here?
I think, uh, you know, AMD and NVIDIA made opposite memory bets. AMD gets its bandwidth from mRDIMM and modules with buffers that have to be powered and cooled.
NVIDIA uses low latency or, um, uses low power phone lineage memory. So neither company counts a single watt, uh, of their headline power, and that's where they differ the most. So it's kind of like
two different schools of memory thought. I'm not-- I don't know which one is right or which one is better. So it's, that's where it's kind of hard to, to balance out and figure out which one makes the most sense.
You know? One obviously has, you know, buffers in it, and it's cooled, and the other one uses, like, the same types of memory they use in, like, cell phones. So who's right? We'll see with that.
Maybe zooming out for a final take, you know, we're heading into earnings week here. We're gonna cover a lot of the, the power shells, NeoClouds, data center earnings. Um, what...
You know, you probably look a little bit more at the, like, chip level, the actual upstream production.
But I'm curious, like, when you see these types of open questions on AMD, will, will AMD's, uh, uh, an- any, uh, information they do or don't give tomorrow, will that inform any opinions you have about the rest of the actual, like, data center operators and construction companies?
I think demand is still outstripping supply.
The question from a data center operator is to make sure they have the right stack and equipment to eventually, hopefully ope- operate profitably because I think your biggest cost is energy, right?
So I don't see energy costs going down. So if they're scaling up and it's a finite amount of energy, what is your wattage load and how is it all working?
Because you don't want to get overloaded or have devices take more energy than they say they do on their specs or whatever it is to have those issues. And I think that's something they need to mitigate.
And, and in this situation, because there's so much demand, it's like everybody's getting business. I don't see, like, a big slow- Like, it's not like a, it's not like a short report or anything like that.
It's just like a question to just bring to the industry to just level the playing field. So even if there's other startups that claim these sort of things, like, kind of use the same metrics, so
there's an apples to apples comparison on these. Ben, thank you so much for your insights. I hope you get the answers you want tomorrow. [laughs] Come on, Lisa. Tell me what's going on. Yeah.
Lisa-- Tag Lisa in the comments, everybody. Uh, [laughs] Ben, thanks so much for your time. Mayb- We'll, we'll probably run it back soon, so cheers. Let's go. Let's go. Thanks, guys. Have a good day. You too.
Thanks, Ben. You too. All right, bye-bye. Kind of a renaissance, uh, podcast here, covering all things from power shells to Mongolia to AMD 86 and Arm trends. So that will wrap it up for the show today.
I do want to call everybody really quick to look at-- We, uh, have the schedule posted on our Twitter here for the, uh, earnings weeks events we are covering.
Specifically tomorrow morning, tune into our channels for Cipher Digital and HUT8. Then we will have Ionic Digital C-suite person on the pod to chat, uh, about what they are up to.
But make sure to follow all Blockspace content this week. If you cannot get enough of our video live stream and podcast, head to our website for all written content, blockspace.media.
That's not blockspace.com, it's blockspace.media. This show is brought to you by CleanSpark, NASDAQ listed ticker CLSK. I'm Charlie. I'm Colin. And we'll see you tomorrow.
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