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On y'all. Welcome back to Blockspace Live, coming at y'all fresh as daisies on this Tuesday morning, and we've got a freaking packed docket today, Charlie.

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We're going to head off the show, as we discussed yesterday, with our first earnings week update, specifically tackling Cipher and Hut 8's latest quarterly earnings that dropped this morning.

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We live-streamed it on YouTube and X. If you wanna go watch the full earnings calls, go ahead and head over to our YouTube, and you can find them there.

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We'll be heading off with Hut 8, moving on into Cipher, and following that, we will get into the rest of the news for today, starting off with Bitdeer inking a $4.7 billion AI colocation contract in Norway, with Anthropic reportedly the counterparty or one of the counterparties on this lease, according to Bloomberg.

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We've got the details for our first story following earnings.

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After that, Andy Stewart, the CEO of Ionic Digital, comes on to talk about their latest public debut, their in-scale deal for AI colocation, and what we can expect from the latest Bitcoin miner turned AI play to hit public markets.

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After that, we have a note on ERCOT's Batch Zero hitting some bumps in the road. There is so much demand for the Texas grid that Governor Abbott is now mandating audits of all Batch Zero applicants.

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We'll have that for our third story on the day. And for our final story, we've got Iren finalizing a $625 million acquisition for Mirantis as it seeks to bolster its AI software offerings.

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That's right. Blockspace goes live every weekday at 1:00 p.m. Eastern. We are compute's daily live show featuring quick hits on AI, data centers, markets, and emerging technology. This is earnings week.

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You can catch all earnings week content here live on the podcast.

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If you miss the live stream, it turns into a podcast later, anywhere podcasts are found, and then it is supplemented by a bunch of written material, which you can find all across the internet, but the easy place to go is our website, blockspace.media.

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That's right, go to our website, blockspace.media for all sp- uh, Blockspace content. This live stream is sponsored by CleanSpark, NASDAQ listed at ticker CLSK. More on CleanSpark later on in the show.

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Colin, we just kept adding stories to this day's live stream. It's just earnings after story after story, and we're leaving off some stuff so-- because we only have, what? Hour, hour, hour and a half, so

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let's kick it off. Yeah. There's a lot we could have included today. Yeah. And it came, it's almost like the deluge hit as earnings started so. Yeah. Yeah.

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So we're gonna kick it off with the earnings update 'cause this morning we had Hut and Cipher back to back, one right after the other. In fact, they did cross over.

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So I like to imagine that I'm listening to both at the same time in one ear, uh, in, in, you know, one ear per earnings report. Yeah. You kinda have to. They're all stacked up this week.

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In fact, tomorrow's schedule is even more hectic. We got three, two of which completely overlap, one of which, uh, two, and I also overlap with the first one h- uh, tomorrow.

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We'll give an update on the earnings that we plan to cover tomorrow. But first, headline here from Blockspace. We'll start with Hut 8. Hut 8 misses estimates as revenue reaches 749,

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uh, seven, 704, four, $704.9 million in Q2. Excuse me. [lip smacks] Excuse the stutters there. So Hut 8 ended up falling this morning following earnings on those misses, as this article points out.

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The headline numbers are as follow, revenue 7, $74.9 million in Q2 2026 versus a consensus estimate of 76.8 to 80.2 million, so about a 2 to 7% miss there.

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The big miss, though, for the street came on earnings per share, an estimate of negative $1.27. Earnings per share was the act- or was Hut 8's actual earnings per share minus $1.27.

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Estimates were coming in around 48 to 64 negative in terms of earnings per share. So Hut 8, big miss there. Adjusted EBITDA came in at $10.4 million. That is less the change to the fair value of their cryptocurrency.

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Hut 8 still has actually a pretty significant Bitcoin bag. When you include that depreciation on the Bitcoin stack, it came in at negative 94.6 million. Total net loss of 177.1 million.

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So digging into these a little bit further, revenue was up 81% year over year, 74.9 million versus 41.3 million, driven almost entirely by compute, of which, uh, was 72.5 million of the total.

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That is from ASIC compute with the American Bitcoin leasing deals that they have with their subsidiary, AI Cloud and Traditional Cloud.

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Power revenue fell, but it was a, it's a marginal amount, so it's not really material. And digital infrastructure r- roughly flat at 1.3 million.

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Um, there's also an additional 27 million of colocation style type revenue from its unconsolidated Keene Mountain JV that shows up in equity earnings, not in headline revenue, so that's important to flag.

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Net loss, again, was driven by change in its Bitcoin holdings. Headline net loss was driven by a $138.6 million write down on its Bitcoin stash versus a 217.6 million unrealized gain in the prior year period.

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So double-edged sword there with Bitcoin. As we all know, now the accounting rules allow you to actually count that as unrealized revenue and/or unrealized gain on your balance sheet.

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So when Bitcoin's doing great, these companies look like they have more of a, uh, of a gain than they actually do 'cause it's paper gains.

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Their interest expense jumped to $51.2 million, largely driven by these, uh, new project-level financing lease, uh, financing, uh, notes that we'll get into here on the balance sheet. Moving on to that balance sheet.

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I'll cover this chart, then I'll toss it to you before I get to some of the updates on their AI business line. Total cash came in at six point seven nine-- or restricted cash came in at $6.79 billion.

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Unrestricted came in at two hundred and thirty-three point six million. That restricted cash is ring-fence tied to Riverbend and Beacon Point per the debt that they took on for project-level financing for those sites.

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Total liquidity with cash, restricted cash, and BTC holdings came in at eight point one billion, um, of which seven point six billion is attributed to Hut 8 and almost five hundred million to American Bitcoin.

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Um, this is, uh, Hut 8's fully owned subsidiary.

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They own roughly a fifty-four percent stake of American Bitcoin, which just does Bitcoin mining, and that roughly half a billion dollars on American's Bitcoin balance sheet is largely attributable to Bitcoin holdings.

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Total debt, this is where it gets interesting because Hut 8 has been

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cleaning up its balance sheets, so to speak, retiring some of its convertible debt so nothing can float back up to the main entity, Hut 8, and focusing on these project-level financing deals for Riverbend and for Beacon Point.

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So total debt came in at seven point nine billion, roughly, right there roundabouts, specifically dominated by the four point two five billion Beacon Point phase one note, which is financed at six point one two nine percent, and three point two five billion Riverbend note at six point one two percent as well.

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Both are non-recourse to the parent. They also have a two hundred million dollar term loan, a one hundred and fifty-nine point three million dollar convert, and a forty-nine point six million dollar note. Um,

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one thing that's worth pointing out, there was a one hundred and fifty million CoAt2 convertible note that was converted to equity in May 2026.

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So now the company says that it has no general recourse debt at the parent level.

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And its total Bitcoin stash was valued at one billion fair value at the end of Q2, which is down from one point four billion at year-end 2025.

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Charlie, toss it to you real quick for second thoughts before I get into some of the data center updates. Uh, my thoughts are pulling up DI metrics to look at the sector. Power shells roughly flat for the day,

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um, overall, but that's not because it's not that everything's flat, it's because it's a mixed bag. As you say, Hut drops earnings underwhelming or underperforming expectations.

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Hut down currently five point eight percent it looks like so. Uh, I'll throw it back to you. Yeah, definitely taking a haircut today, Hut 8, um, after ear- missing earnings.

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As you mentioned before the stream, Charlie, maybe there's some noise to hear with the Batch Zero distinction. Both Hut 8 and Cipher have, um, extensive expansion, uh, perspective expansion into Texas.

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We'll get to that when we cover the Batch Eight stuff.

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But I wanted to give a quick note on those data center builds for Hut 8, just as a reminder for those who maybe have forgotten or just to kind of give people a breakdown of where Hut 8 stands today.

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So the big headline for Hut 8 this quarter was the full commercializ- commercialization of Beacon Point in Corpus Christi.

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This is a roughly one gigawatt facility, which phase one, five hundred megawatts gross, three hundred and fifty-two megawatt critical IT load was already leased to an unnamed tenant.

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Reports from Bloomberg and others say that this is likely Nvidia.

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Uh, that has not been confirmed by Hut 8 nor Nvidia in public disclosures, but that is the reporting as it stands from people source, uh, close to the matter.

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Then before quarter's end, the second three hundred and fifty-two megawatt IT lease-- or subsequent to quarter end, excuse me, the second, um, three hundred and fifty-two megawatt IT lease phase two was signed with the same tenant, which commercializes the full one gigawatt of utility capacity at the site.

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The combined campus lease is valued at nineteen point six billion over the contract terms with one point three billion average net operating income and renewal options that could push the potential campus value to fifty point two billion.

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Construction of phase one and the campus substation is underway. Initial energization is targeted in Q1 2027. Initial data hall delivery in Q3 2027. So looking at generating revenue on that site come 2027.

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Riverbend is the other staple in its AI business. It is leased to Fluid Stack. This was the first deal that they announced.

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Three hundred and thirty megawatts gross, two hundred and forty-five megawatts critical IT, fifteen years with seven billion total contract value.

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Vertical construction has commenced along with substation construction and initial long lead equipment deliveries. The initial data hall is scheduled to come online Q2 2027.

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So that leaves total energy capacity under construction for Hut 8 now at one point three three gigawatts, three hundred and thirty at Riverbend, one gigawatt-- three hundred and thirty megawatts at Riverbend, one thousand megawatts at Beacon Point.

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In the development pipeline, they're billing at eight point six six gigawatts total, with five point four gigawatts under due diligence, one point eight eight gigawatts under exclusivity, fifty megawatts under development, and one point three three gigawatts under construction.

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This excludes, notably, one gigawatt of potential Riverbend ex- expansion on which Fluid Stack holds a right of first refuse-- uh, of, of first offer. So that's the breakdown of where Hut 8 stands.

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There were no really big material announcements in the Q2 earnings, mostly just a victory lap on what turned out to be a banner quarter for what has emerged as one of the front runners in the Bitcoin miners turned AI companies.

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And did you add that I believe, uh, KBW, uh, kept their outperform rating on Hut here? I'll, uh, I'll share this because in light of this, um, KBW,

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uh, keeps outperform on Hut with $157 price target following Q2 earnings. So even though Hut's down, that's KBW projecting again, you know, investment bank, they're talking their book, they're selling.

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Yeah, they're, they're on the sell side for Hut 8. But- But we publish it 'cause it's news. Like it's, you know.

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Well, and they always-- the thing that's more interesting about the price targets there are the breakdowns in the methodology for how they're reaching them, and also they usually get into the contract terms in more detail than other sources.

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So... Yeah. So, uh, to note, let's go to Cipher. Yeah. We will move on to Cipher. Leave it there with Hut 8 by just saying that most of this revenue will start booking in 2027.

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So right now they're still leaning on their Bitcoin mining con- uh, business line for revenue. Overall, though, some strong, some strong developments for Hut 8 last quarter.

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And I do wanna flag the, the debt, the project-level financing for those leases because those interest rates are some of the lowest we're seeing.

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They're, they're right there with Cipher in terms of some of the lowest of the cohort. So also hat tip to the, to the finance division for getting those deals done. All righty. Moving on to Cipher here.

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Also missed earnings, also punished by the street for it. We'll get into- Punished a little bit harder this time. I mean, it's the biggest-- It's down pretty significantly today while everything but Hut's up so. Yeah.

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I mean, the, the double-digit drop today. Now, if you look at the five-day, it's not that bad. They actually had a run-up leading up to earnings that kind of cushioned some of the blow there.

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But the headline here from Blockspace, "Cipher Digital Delivers Black Pearl Capacity Early, Adds 900 Megawatt Apollo Option." So Cipher does actually have some material updates here.

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The Apollo option is a 900-megawatt site in Texas that they have, that they're advertising as the option to expand there specifically as it relates to procuring power. There's no lease there yet.

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Just wanted to get that out of the way. And also, they delivered Black Pearl early, two months ahead of schedule. Worth pointing that out once we get to the operational side of things.

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But first, we will cover the headline numbers here. Cipher's revenue for Q1 2026, 24.8 million, as opposed to consensus estimates of 29.3 to 32.5 million.

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About a 15% to 24% miss, part of the reason why you're seeing them taking a beating greater than Hut 8 as, uh, as the street reacts to these earnings.

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Earnings per share came in estimated, uh, at negative 14 cents to negative 24 cents per share. Actual came in at negative 65 cents. So like Hut 8 as well, large miss there on the earnings per share.

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Of course, I do think it's worth noting out that, or, or pointing out that both of these companies are posting revenue currently based on their Bitcoin mining lines and-- but their valuation is 100% pegged to these AI and HBC leases that will start generating revenue, uh, in Hut 8's case 2027, but in Cipher's case a little bit earlier here.

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So what drove the earnings that we're seeing from Cipher? Bitcoin mining revenue fell 43% year over year, 24.8 to 43.6 m-million. Um, hash price network difficulty, this is no surprise here.

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It's been very bad to be a Bitcoin miner right now, and Cipher not an exception here in the sense that the entire network is down right now and margins are incredibly thin.

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The net loss that we saw, which was 267.5 million,

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was largely driven by a, by non-cash and financing items, a 150.5 million non-cash change in fair value of a warrant liability, and a 66.7 million of interest expense. Also 19.4 million of depreciation and amortization.

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Adjusted EBITDA was mostly driven by mining revenue decline and also a higher stock-based comp and executive compensation.

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They've been hiring out for their HBC and AI business lines, and those, those salaries come with hefty price, uh-- Those salaries come with, with hefty price lines.

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So the adjusted EBITDA for Cipher coming out at 30, negative 30 million for the year, again, mostly driven by that stock-based comp and higher compensation for some of these new employees for the AI lines.

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Going on to Cipher's balance sheet, 100... 831.8 million in unrestricted cash. Total cash plus re- plus restricted cash came at 4.56 billion.

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Like with Hut 8, most of that is tied into project-level financing, so they can't touch it except for those specific projects. Total debt stood at 6 billion,

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and similarly to, uh, similarly to Hut 8, most of that debt exists in the realm of project-level financing for these sites that they are building out.

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I will get to those sites right now, Charlie, unless you have something that you wanna add so far to the numbers. Uh, I don't have anything to add. Uh-

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We haven't mentioned-- We haven't dropped the word batch zero yet, so no. No. Yeah. Yeah. We'll, we'll get there here in a second. And also, I wanna save most of that commentary for when we- Yeah...

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get to that actual news item- Yeah... 'cause I do think there's a lot to unpack there.

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Um, going back to that debt before I get to the projects that it's tied to specifically, in Q2, they raised 810 million in a senior secured note at 6%, again, very attractive interest rate, uh, for the Stingray facility, which has that at being fully-- which Cipher has says is fully funded at this point, so that AI facility has all the cash it needs to get up and running off the ground.

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CapEx for the first half of twenty twenty-six came in at 964.3 million for property and equipment, plus another 542.7 million accrued but unpaid. Again, underscoring just the capital intensities of these builds.

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So for specific data center updates, we'll start with Black Pearl, which has Amazon Web Services as a tenant, 300 megawatt gross, 216 megawatt critical IT, 15-year lease at 5.5 billion total contract value.

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Um, first capacity for this site was delivered at the beginning of August, two months ahead of schedule, and rent has now commenced, so expect to see that recognized on their Q3 earnings.

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And there are-- They have 96% of the equipment secured, and remaining phase one halls are in fit-out, and phase two, the foundation steel and underground electrical is, is, uh, being worked on currently.

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Moving to Arbor Lake, the Fluid Stack lease, 300 megawatts gross, 207 megawatts of critical IT for a 10-year lease at 3.8 billion in total contract value.

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The tenant has begun beneficial use, that is Fluid Stack, which is partial building occupucy-- occupancy, and first network ra-racks have been delivered.

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A hundred percent of the equipment is secured, with initial delivery still targeted for September 2026 and rent commencement starting October 2026. So two su-- uh, sites coming online for Cipher.

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One, the Black Pearl site already online. Arbor Lake coming for with rent commencement just at the beginning of Q4. Now looking at Stingray, the other Amazon Web Services site. A hundred megawatts gross

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with 70 megawatts critical IT, 15-year lease valued at two billion dollars. It's now fully funded, like we said, during, uh, via that Q2 bond deal.

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The earthwork, grading, pad prep, and underground electricity are underway, and concrete and steel to begin being laid in Q3 2026.

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Seventy-five percent of the equipment is secured at this site, with delivery targeted in H1 2027. There's also this new site, Charlie, that we touched at the beginning.

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Cipher has acquired an option, not a lease, on up to 90-- 900 megawatts near San Antonio, Texas, on 288 acres. It has submitted as a studied load in ERCOT's Batch Zero. No tenant attached yet.

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Like we said, that is where the Batch Zero, um, considerations are interesting here for Cipher because this could potentially throw a wrench into their plans to get that site on sooner rather than later, depending on how things shape, shake out.

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[lips smack] Um, its pipeline is basically unchanged. It's targeting 70 megawatts in Q3 2027 at Reveille. The, this is a Texas site. All of these are Texas except for this one.

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Ulysses, 200 megawatts, targeted Q4 2027, and that is in Ohio. Colcus at one gigawatt in McLennan, 500 megawatts. Makenska, 500 megawatts. All of these are pre-lease.

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Um, Colcus, McLennan, and Makenska have n- been noted as having deposits funded, land secured, and FEA studies submitted for Batch Zero.

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So there are three sites in that pipeline, um, four if you include Apollo, that are now at the whims of the new Batch Zero process. Cipher has got their foot in the door for Batch Zero, so that's good.

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Cy-- Uh, the CEO, Tyler Page, actually had some comments regarding Greg Abbott's most recent, uh, mandate for audits.

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Um, he was upbeat and positive about the developments and specifically Cipher's ability to address them.

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Time will tell exactly where this is going to land because, again, over 400 gigawatts of demand through this Batch Zero process and not [chuckles] all of that's gonna get through. There are only gonna be a few winners.

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There are gonna be a lot of losers, I would imagine, um, at least for this first round. So yeah, doozy. I will, uh, just so we can keep on schedule, I'll just pull up. According to DI Metrics, Cipher down 11%.

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Said a little bit earlier the entire sector's [chuckles] actually flat.

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Slight-- Now up 0.3% for Powershell, but, uh, Cipher with underperforming earnings and, uh, you know, with their power pipeline in Texas, given the Batch Zero, Governor of Texas,

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uh, Greg Abbott's comments and potential pause, down 11.2%. So, uh, Colin, I think we rotate, uh, to the next story, I think. Okay. I think we can leave this here.

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We'll cover-- We'll pick back up on some of the Batch Zero stuff with Hud Eight and Cipher specifically, um, once we get to the Batch Zero segment after our interview.

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But overall, just to recap for Cipher, obviously a strong quarter in terms of deal flow.

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We should start seeing those eight-- that HPC revenue hit their revenue lines on the Q3 and full year 2026 earnings when those come out. So yeah. Let's go ahead and move on. Do you have anything to read? Yeah.

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We're gonna h- we're gonna hit the interesting, uh, Bitdeer deal up in Norway potentially with a Frontier lab, but we'll get to that right after a word from our sponsor, CleanSpark.

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You know, Charlie, I think we'll do a little switcheroo with the schedule here. Last week we- Let's do the switcheroo... last week keep Andy Stewart of Ionic Digital there waiting in the wings.

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We will have him on, got him scheduled for 1:30 PM ET. So let's go ahead and do the interview with Andy, and then we will get onto Batch Zero, Bitdeer, and Iron to close it out. Ooh, love it. We're bringing Andy on up.

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Welcome to the show, Andy Stewart. Thank you very much. Good to be here. Yeah, appreciate you joining, Andy.

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A lot to unpack here for news today, and, uh, not least of which we wanted to have you on to discuss Ionic Digital's foray into public markets. Y'all went public in July through a direct listing.

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You've been coming out hot out the gate with this Enscale deal.

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And, you know, for background for those who have listened to the show or don't know this, it's an incredible success story, Ionic Digital itself being born out of Celsius's bankruptcy case.

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The, uh, uh, the assets put in, put into new shepherdship and new ownership, and now going public, pursuing AI business lines.

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So there's a lot to unpack here in terms of where the company's been and, or where it has been and where it is headed. And I think a good place to start, Andy, is to start with specifically the direct listing.

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And I'm curious what Ionic Digital's rationale was for doing this as just a straight up direct listing rather than going for an IPO route. Can you speak to that decision from a strategic standpoint?

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Yeah, no, ab- absolutely. So as you said, the history is, is a bit, uh, interesting and, and, and different.

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And as part of the Celsius bankruptcy, when Ionic was created, we gave shares in Ionic to 80,000-plus, um, uh, creditors in, uh, in, in Celsius, people who had really been defrauded out of, out of their holdings.

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And, uh, while they had shares in Ionic, they were promised, uh, liquidity. And through kind of some ups and downs, it took a little time to get there.

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The board made a decision to pivot into AI, which translated to the Enscale contract, which I'm sure we'll talk about, and, and bringing me on board.

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Um, but through all of that, we felt it would be kind of disingenuous and even unfair to try to do an IPO as opposed to direct listing. In an IPO, you typically have a significant lock-up period for, for shareholders.

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The Ionic shareholders have b- been shareholders for, for a couple of years, but even before that, they, they had their, their money basically stolen by, by Celsius.

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So many of them had been waiting three, even four years to get liquidity. So through a direct listing, we could provide that instantly.

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So, so all of the shareholders who've, who've gone through the process of registering and transferring their shares now have the ability to get liquidity.

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So that was really the impetus behind the, the direct listing approach. That, that makes a lot of sense, a lot of folks waiting a long time to recoup that capital.

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And opening into a public market that has obviously been hot on the AI names, and Ionic Digital not wasting any time by having this Enscale deal under its belt as it went public.

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I think that's a good place to move into for the kind of the remainder of the interview.

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I think we'll kind of focus on this as it relates to that, the actual contract, the terms, and also, um, approaches to financing for this.

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[sniffs] So, uh, just to kind of start, can you give us a breakdown of this deal and specifically the relationship between, uh, Ionic, Enscale, and Microsoft in the chain here?

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Also, can you talk about the contingent where Enscale has promised to pay for construction of the site?

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'Cause that has been a deal that we have not seen replicated in the sector since CoreWeave and CoreSite struck it for the kind of the seminal AI deal for this entire cohort. Yeah, it is really a unique deal.

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So signed in October of last year, right, right before I joined. So again, I mentioned that the board kind of pivoted us into this space. Um, the deal is 10-year triple net, uh, power shell land lease.

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So we had the 234 megawatts at the site, which was one of the most attractive aspects of it, of the property to Enscale. And the paths were poured, and the shells were in place. The steel infrastructure was there.

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Uh, but Enscale is, is doing the fit out. So when you see a headline number of $65 per kW, many people see that as, as being low. But a b- a better way of thinking about it is return on invested capital.

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So the capital that we've put in to enable the $2 billion contract is about $10 million in total. Um, Enscale, their approach is to be vertically integrated as best as they can.

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So they are spending the, the, the, the CapEx to actually build out the data center. So we effectively, we went cash pay on rent in August. Uh, Ionic has satisfied all of our obligations for that 234 megawatts.

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And, and Enscale will take on the burden of the data center and the GPU CapEx, uh, going forward. And then a- as you mentioned, Enscale, uh, their, their, uh, their offtaker for all of that GPU capacity is, is Microsoft.

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And so what does that mean for the expansions, um, with regard to this?

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'Cause Enscale has granted Microsoft the right of first refusal on the remaining 377 megawatts, and that's under Enscale's right of first refusal with, with Ionic. Correct.

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So if Microsoft exercises, does Ionic repaper directly with Microsoft, or does Enscale stay the counterparty of record for this lease specifically? So- Does that change anything in terms of the relationships? No.

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So, so two things. One is, um, M- Microsoft went to Enscale, uh, earlier on this year and said they needed, they wanted additional capacity. So we signed a lease amendment.

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So the first incremental 89 megawatts that we get will, will go to Enscale. And I heard earlier, I'm sure you've been talking about Governor Abbott's, uh, dir-directive yesterday.

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So we are, uh, in the process of adding 466 megawatts of incremental grid power to our site as part of the Batch Zero process.

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When we g-have that power, when it becomes available, and we're confirmed in Batch Zero base load, we'll take that to market, and we-- Ionic has the ability to, to develop the back half of the property for Enscale or, frankly, for anyone.

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Um, Enscale certainly has a ROFR where they could match the terms, whether that's a turnkey build or a power shell build.

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So En-Enscale has the ability to, to match those deals, and we would envision Enscale then passing that along to, to Microsoft as part of their, their broader relationship. So we really have, uh, flexibility.

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I'd say one thing that we've been, uh, pretty conservative on is, is not taking that power to market yet, and the rationale is that there's so much kind of fluff and noise in the market.

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A lot of people trying to sell power they don't actually have. We wanna be known as the group that provides certainty around power.

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So once we get the confirmation from, from ERCOT, it doesn't sound like it's gonna be this Friday, but hopefully soon, soon thereafter.

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Once we get confirmation on that, we'll take that to market and really maximize the total return we can get for, for our shareholders.

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Ca-can you speak to Batch Zero a little bit as an operator that's specifically in this, uh, you know, in this massive reworking of how the grid pro... the ERCOT processes all of these large load requests.

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From what you've seen while working with the--

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w-working with ERCOT and working on this Batch Zero process, do, do you think that they're approaching this the right way in terms of how they're reevaluating what gets interconnection priority and what actually is considered, h-how should we say it, vetted enough to actually be- Yeah...

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even, even considered for con-- uh, for interconnection? Like, what do you think about the new processes?

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'Cause it kind of, from the outside looking in, it seems like they're kind of building the car as they drive it, but I don't know what a better way to do it considering how quickly things are moving in this- No, your, your, your spot-- that last point is spot on.

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I think they had so-- they were inundated with requests, and we've talked about the four hundred and fifty or four hundred and fifty plus gigawatts of, of power, uh, that are, that are kind of in the queue.

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That's a great headline number. What, what ERCOT has done is they're trying to be as objective as possible, right? They don't wanna introduce subjectivity into it. So when was your FEA signed?

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When was your large loads, uh, submitted and approved and studied?

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So the more objective they can be in kind of setting those parameters, the more defined and clear they can be in terms of determining who's in the batch load, ba-Batch Zero base load, Batch Zero to be studied, or excluded from Batch Zero altogether.

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So I think they've kind of had to build a car as they were driving just because of the, the nature.

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But they've been, um, sure there have been some stops and starts, but they've been pretty thoughtful and, and, uh, in trying to be as consistent as they can be in a very fluid and, and dynamic market.

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Andy, as y'all look towards expansion, you mentioned being conservative about forward guidance here, making sure you actually have the megawatts allocated before you...

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or, uh, fully, you know, fully owned before you can actually advertise it to the market. Will Ionic Digital

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prioritize the deal structure that y'all have struck with Enscale in terms of making the tenant pay for most of the construction while y'all just cover the electricity component, or will you move towards more of a, a fully owned powered shell model where y'all will develop the data centers in the future?

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So it kinda depends. Are you- Yeah... thinking a mix might be good? It's, it, it'll be the full spectrum. So one of the things we like to say, we're, we're a data center team.

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I've been in this space since about two thousand and eight. Mark Lambourne, our Chief De-Development Officer, has been building data centers for thirty plus years for enterprise, for hyperscalers.

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So we, we, we know and understand the business. Um, what we will do is, is really focus on the best risk-adjusted returns that we can achieve for any one property.

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That could be a capital-light model where we're, we're getting great return on invested capital, but it could go all the way to a turnkey build where we're spending twelve, fourteen million dollars per megawatt and delivering the complete solution or even in a build to suit or a design build.

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So a lot of different kind of permutations, but the, the real goal is, is just driving the best risk-adjusted returns. We think that is the, the recipe for a successful company for the long term. Oh, Colin, you're muted.

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Sorry. Charlie, I don't know if you have anything you wanted to throw in here before I toss a few closers. No, I don't. I throw it back to you. Okay. Uh, An-Andy, a little bit of a, uh, hardball question- Uh-huh...

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before I throw a closer at you. I'm curious about the-- So the Enscale deal is triple net lease, which makes total sense considering they're building it, right?

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It's going to be their capital at stake, and they're the ones operating the building, so they need to cover all of the insurance- Mm-hmm... taxes, et cetera. I'm curious about the credit risk on a, on a build like this.

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Um, we're starting to see, you know, the street make more of a fuss about the specific counterparty involved in these things. Mm-hmm. I know Microsoft as the end user of that Enscale compute probably helps a lot.

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But are there any fallbacks, backstops, or other recourses in this lease that will protect Ionic in the case that Enscale isn't able to deliver on their obligations? Yeah, absolutely.

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So we have a five-year guarantee from Nvidia. So, uh, and that covers all rent payments over the first five years of, of the contract. So at the time when we signed the deal in October, that was kind of market leading.

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Since then, we've seen ten and fifteen year guarantees. Um, I'd say that we are very, very comfortable with that five-year guarantee and, and also very comfortable with Enscale.

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Um, the rate at which they're growing, the investors they've brought on, their likely path to becoming a public company.

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Uh, it, it reminds me a lot of the discussion on CoreWeave two and three years ago, when a lot of data center operators were minimizing their exposure to CoreWeave because they weren't really quite sure, um, what the company was or where it w- where it would go.

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Uh, and g- once they went public, that alleviated a lot of fears.

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So for us, we've got a tremendous amount of respect, uh, for Enscale and, and where they're headed, and feel like they're a, a great, a great tenant and, and credit, um, beyond the, that first five years of NVIDIA.

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Uh, but NVIDIA's pretty, pretty awesome to have [chuckles] as well. Yeah, no doubt. It's always nice to have the king maker on your side, right? Yeah. Uh, well, Andy, this has been great.

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As a closing question to give people an idea of where y'all's focus will be for the rest of the year, what, what are...

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what is Ionic Digital prioritizing now that this first deal is moving through the construction phase? What will be the focus for the rest of 2026? We are really focused right now, and I'd say on, on two things.

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So one, W- Ward County and, and getting that built out and getting the additional 466 is, of course, the top priority 'cause it'll unlock so much additional value.

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But it is really to building out our development pipeline. So our thesis is, is a little bit different. We're focused primarily on going after what we think are inference and agentic workloads.

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Um, all the data centers that I've been a part of the past 20 years were built for CPU workloads. Um, 10, maybe k- 10 k- 5, 10 kW per rack, uh, air cooling, uh, even the floor loading is, was based on CPUs.

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As you're seeing the prevalence of GPUs and TPUs and XPUs kind of pushed out for ins- inference and agentic, we think there's gonna be a whole new wave of div- digital infrastructure built in and around the major metro markets.

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So while we have this great core asset in, uh, in Ward County and the Enscale contract, we have 112 megawatts in Midland, Texas that will be monetized in, in short order.

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Um, a lot of focus for the rest of the year is building out the d- that development pipeline 'cause as you guys know, it takes two, even three years to go from idea to actually monetization.

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So we've gotta start thinking about '28 and '29 so that it can pr- provide that kind of long, steady cash flow growth for our shareholders.

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Well, we'll be keeping an eye out, and definitely have to have you back on later in the year for an update, Andy. Really appreciate you taking the time, man. Yeah. I really appreciate the invite. Thank you very much.

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You're welcome. Have a good day. All right. You too. Take care. All right. We're gonna keep going. We swapped out Andy with the Bitdeer Anthropic story, so we'll go to that here in just a moment.

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So if you'd like to learn more, go to luxur.tech/commander to get started. All right. So single best performing stock right out the gate today was Bitdeer jumping some 23% at market open.

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Currently, it is at plus 3.3%, so a little bit correction. Why? Well, they've announced a big deal with a tenant that they cannot name in Norway. Here's the deal.

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Bitdeer ex- executed a 16-year colocation lease at its TIDAL campus in Norway, which includes 121 megawatts of critical IT backed by about 133 gross megawatts, $4.7 billion in contracted lease payments over the initial term, and there's an eight-year renewal option that could stretch to roughly $8 billion over 24 years.

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And the tenant is an AI startup recently raising $300 million called Volta. They're an NVIDIA cloud partner and reportedly has NVIDIA as a backer. This lease is not new.

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This lease was announced, um, back in June con- or Bitdeer signed it conditionally, and the effectiveness hinged upon Volta locking down its own customer and supplier arrangements.

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At the time, Bitdeer sold off, down about 7% when it was announced. However, Bitdeer soars because the news is, who is the tenant, who is the deal that Volta has? And Bloomberg thinks that it's Anthropic.

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So Anthropic signed a six-year, $10 billion computing agreement with Volta Infra Holdings, and, uh, it pretty much has to be the Norway, uh, the Norway site that Bitdeer's got.

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There's not that many sites that fit this profile. Bloomberg does some deduction, some sleuthing, and so you put two and two together, and it's just gotta be this Bitdeer site.

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What's the deal look like between Anthropic and Volta? Well, Anthropic's reported six-year computing contract six sits above a longer infrastructure agreement between Volta and Bitdeer.

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As detailed in a press release Tuesday, Bitdeer signed the 16-year lease services agreement.

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So, uh, Bitdeer puts the remaining CapEx at about $500 million or $400 million or, I'm sorry, $4 million for each contracted IT megawatt.

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The operator intends to pursue more debt while keeping ownership of the TIDAL campus. So Bitdeer still is on the hook for financing and delivering the infrastructure behind Volta's customer commitment.

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I'll throw it to you for a take, Colin, but I've got, um, some numbers on the contracted revenue per megawatt, which are pretty attractive here. Yeah, I was actually gonna run into some numbers here real quick. Okay.

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Yeah, you pull up the numbers. This is pretty-- 'Cause this is pretty interesting. Got a nice little premium here. Yeah. You might have a little more to tease out from what I have, but I do have a few just TLDRs.

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The remaining CapEx on the site is about half a billion dollars, which is four million per contracted IT megawatt.

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Four million dollars of contract per contracted IT megawatt, and Bitdeer intends to debt finance that separately. Management accepts the financing to also free up capital for other AI and HPC developments.

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Um, this lease comes out to two point four million dollars in average annual revenue per IT megawatt in the base term with a ninety percent net operating income margin. Very attractive.

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The delivery for the four data halls are in two equal phases. Phase one is targeted s- for December 31st 2026, phase two targeted March 31st 2027.

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There's a separate forty-seven megawatt, uh, gross megawatt, which is two more hall, halls outside of this lease that is targeted for H2 2027, which will round out the full title campus at a hundred and eighty gross megawatts.

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Yeah. So where does this premium sit among other con- contracted capacity? So basically, it sits pretty much at the top of the stack.

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Um, this again is in Norway, and compared to like a US comp set, this hits twenty-five to forty percent above US comparable US deals.

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Um, just s- pulling some spot deals that Claude helped me pull up here using the da- Dimetrics uh, uh, MCP server. Cipher Black Pearl with AWS contracted IT per megawatt per year, one point seven million.

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Hut Eight Beacon Point, undisclosed tenant, one point eight six million. Hut Eight RiverBend, one point nine in Cipher Stingray with FluidStack and AWS respectively, one point nine million each.

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So Bitdeer Tidal with Volta implied, uh, or intuited Anthropic on the back end sits at two point four three million dollars per megawatt. Very attractive. And, and why is that?

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Well, there's multiple reasons, but I think the sh- the real obvious one is the December 2026 energization date. Everybody knows Anthropic is short compute. They need compute.

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That is the thing, the s- the thing that they need above all else to compete with OpenAI, and they need it yesterday. So this site, um, I believe is gonna be NVIDIA Vera Rubens, so the new gen, uh, chips,

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uh, being delivered in December of 2026. This is basically the fir- These are the first large scale megawatts available that can be delivered, and that's why you pay the premium.

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I mean, I know there's some other, um, you know, dynamics like the US deals with triple net and the tenant performs OpEx and pays power directly which, you know, depending on the deal can change.

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Um, but this is really just a delivery date premium is what I understand, uh, Colin, unless I'm reading this deal wrong. Um, I'm curious if the Dimetrics, uh, if the Dimetrics numbers are for critical or gross megawatts.

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Oh. That would be- The 121 critical IT megawatts. So if we were to expand to gross megawatts, which is what?

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Well, no, I'm just-- I'm asking specifically if the Dimetrics numbers are for gross or critical IT for Hut Eight and Cipher, the ones that you mentioned. Ooh, good question.

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Um, I could try to update- I think they are f- based on what I just queried with Claude, they are based on critical IT. So for the premium, you know, it's a good question, Charlie, as to what the--

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why that premium exists there. Maybe it is a speed to power thing. Could also be, um It could also be the fact that, you know, Volta is a European company. They have stricter carbon, uh, emissions mandates.

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All of this is gonna be hydro, right? This is like ninety-nine percent plus hydro for these builds.

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Uh, that to me totally speculating, I could be wrong, but I wonder if that is seen as attractive, especially considering there's not the likelihood of it being interrupted at all. And- It could also be just tax.

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Like Norway's got a history of tax- taxing these, uh, like miners and I-- and IT. So maybe it's that, um- Just more expensive to operate there for a number of reasons. Yeah.

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Maybe it's just more expensive to do things in Norway, but you can get reliable, you know, clean, uh, energy, so that's delivered- Yeah... on a short timeline. So,

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uh, will be interesting to compare these as we're able to dig into the numbers more. I think that kinda does it for Bitdeer, Charlie. Yeah. We should move on to- Let's go to- Quick batch... zero.

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257
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258
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There's no rehypothecation, no wrapping, no bridging, just competitive rates as low as 8.5 to 10% APR. Go to Lagos.finance to learn more. All right, Charlie, let's talk Batch Zero, my dude. Yeah.

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It's gonna... Batch Zero, it's gonna be the word that causes PTSD across investors and miners, and AI workloads everywhere. So, it is, and it's becoming a huge headache for the Texas grid, and we don't have a

260
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article up on Blockspace for this specific story. At least I don't think we do. Nope, we do not. It does not.

261
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But we do have all of the key talking points, and that's specifically this, that, "Governor Greg Abbott orders data center audit, postpones Batch Zero." So this is...

262
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Oh, this is a headline that we posted last night after one of those- Yeah, we posted the headline last night, but it's- it's, like, kind of difficult to dig in, because it's kind of, like, ongoing. Um, yeah.

263
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Yeah, there's a lot to unpack here, and there's a lot of goalposts that are shifting. Hoping to have a guest on sometime soon that can help us make sense of it.

264
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The headline here from Blockspace, though, "Texas Governor Greg Abbott orders data center audit as ERCOT queue reaches 474 gigawatts."

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So Greg Abbott directed the Public Utilities Commission of Texas and ERCOT to audit every data center currently advancing through ERCOT's interconnection process, and block those projects from moving forward until the review is complete.

266
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In response, ERCOT said it would po- postpone its Batch Zero transmission planning study while it implements the directive.

267
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So that, that transmission planning study was scheduled to take place following a bunch of rule changes and meetings that we discussed in July.

268
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This coincides with a push from the, for ERCOT, and a push from the Public Utilities Commission of Texas to figure out how they're going to accommodate all these large loads, anything over 75 megawatts, onto the grid.

269
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And for that context, yes, the queue for

270
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interconnection in ERCOT has grown to, for large loads, has grown to 474 gigawatts of connection requests, more than 5X the grid's record peak demand, and data centers represent roughly 90% of that requested capacity.

271
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That is per Abbott's office. So Abbott is saying, "We need to s- take a step back and look at every single one of these large load applications and make sure that they are fully au- a- audited."

272
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Um, and those audit requirements are as follows. Projected annual and peak electricity consumption, plus any planned on-site generation or demand reduction measures.

273
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A disclosure of whether- whether- whether the project is self-funded or relying on state and local incentives, grants, or abatements.

274
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Water use disclosures, projected annual peak consumption, supply sources, reuse plans, and the cooling design, air-cooled versus closed loop evaporative cooling, et cetera.

275
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The ownership and controlling interest disclosures for the project. Community impact plans for noise, lighting, setbacks, traffic, and emergency coordination.

276
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And any projects failing to meet the PUCT or ERCOT and state requirements must be denied connection, per Abbott's directive. So who knows how long this audit's gonna take, right, Charlie?

277
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But this pushes back the timeline for Batch Zero. They didn't specify when the audit, uh, would take place or the, when the B- Batch Zero study will be completed.

278
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So this pushes back the Au- August 7th classification notice deadline and also the broader calendar, which had a number of milestones going out through, like, the next year. I mean, who knows how long it's going to last?

279
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Colin, I think it could last until November. What's in November? Governor Abbott's re-election. So he is- Uh-oh. I, uh-oh. Gonna, gonna wrap- A little tinfoil... a little tinfoil around my hat.

280
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But this is not just me doing it. I mean, this is, uh, a couple internal calls from notable industry representatives. Uh, I do believe that this is, uh, many things.

281
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There's a community pushback angle, which we could talk about a little bit, but then there's also the political angle.

282
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Like, this is, um, becoming the, like, cross-aisle, cross-socioeconomic, cross-ideology, like, rallying point, and if you're in a somewhat contested election, as Governor Abbott may be, like, you want to...

283
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The, what, how do you appease everyone without actually making a decision? Well, you just, uh, use your powers to pause things while we complete an audit.

284
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Now, he did request, as you said, like, you know, he requested, I believe, uh, or requested that, um, uh, data centers submit, uh, information to the PUCT.

285
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Uh, but there wasn't a whole lot of participation in that, probably for a bunch of reasons. Uh, but, uh, the- the other...

286
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So- so, like, you know, I think the political reason is- is probably first and foremost, so we'll probably have a lot more clarity as, um, whenever that wraps up. The other one is, like,

287
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the- the boots-on-the-ground community pushback has happened, has happened very, very quickly, and I think the average person doesn't realize it because people, you know, people just forget that the way things have been the past two or three months have not been the way things always have been.

288
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So what- what appears to be, like, a resounding, like, massive com- movement, it's really only, like, a few months old, and this really, y- you see this at the county, at the county level in Texas, in my state of Oklahoma.

289
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And, um, the residents are pushing back. And so they can find, uh, ways to delay or nullify the permit process. Um, and so, uh, they've been, uh, inking a lot of wins,

290
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and so this is a very big win for them, uh.

291
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Yeah, and going back to the p- politics versus practicality, I mean, the cynical read, and I don't necessarily disagree with you 'cause it's a huge political issue, is that you wanna have a clear track record going into elections that you're actually addressing this in a responsible manner if you're Abbott.

292
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But there's also just the fact that if you have a 474 gigawatt interconnection queue, and that's 5X your peak capacity, then you're, you're, you're gonna have to change something, right?

293
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Like, you're going to have to go in and change the process, revolutionize it, because the demand you're seeing is just totally unprecedented and would break a grid that wasn't res- responsible and trying to get ahead of the problems, right?

294
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So... Yeah. It, it's certainly the, the, the, the, the pipeline is just has to be rethought.

295
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Like, this current, like, linear progression as we've had, I believe a former guest or two, we talk about on the show, like, the way things are just is not gonna work.

296
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[laughs] Um, but then also you had, like, when, when Governor Abbott said the, uh, the state's water and power survey request, I think in June, only 28 out of 337, 377, uh, data center, uh,

297
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uh, potential data centers, uh, went through and were able to submit that. Why is that? Uh, maybe they didn't think it was that important. Uh, maybe it's just infeasible or impractical, uh, whatever, what have you.

298
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So, uh- Yeah, I think there are a few ways to read that. It's either companies saying, "This isn't worth our time," which I, I doubt

299
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that is the reason, 'cause they- they've made a lot of noise in the Texas regulatory and political class about making sure that these new rules are hammered out. Mm-hmm.

300
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Part of me wonders if it's some of these projects just straight up don't have answers to the questions in those surveys, and s- I think that's a pretty good reason, 'cause like- Right?...

301
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it, yeah, these are ongoing deals, so it's, like, really difficult. It's like how- Yeah... if you don't even have a tenant signed yet, do you know if you're building a 50 or a 200 megawatt site? Like- Right...

302
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that totally changes. Right. And then the cynical read from a libertarian perspective is maybe they're just asking a bunch of nonsense questions, and so companies don't- It's pr-...

303
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feel like they can answer these things, which I have no idea... it's probably all of the above. It's, it's probably a combination. Yeah, there's probably a combination, for sure.

304
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And but it doesn't, you know, at some point it doesn't matter because it, that just looks bad for the industry and can be used as a reference, data reference by Governor Abbott to then pause this process.

305
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It looks like he's being the reasonable guy, and maybe, maybe he is. Uh, this is just, uh, very, very difficult, one of those, like, moments where you, you know, that a moment of flux for the industry.

306
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Um, there's a couple fun little, uh, not fun, there's a couple interesting little, uh, cultural elements to this, and one is, uh, and they're both celebrity, uh, country artists. So Willie Nelson,

307
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an unlikely ally with the anti data center movement. This is from his Facebook. Um, and he started putting, he's really started pushing on this, um, like a week and a half ago.

308
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And this is kind of the quote of his, uh, which has been making the rounds, but quote, "I grew up in Abbott, Texas. I still have a home there with farmed land where I can still see stars at night.

309
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And our community, like many others, needs to fight against data centers invading our land.

310
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The last thing we need is a loud, water-thieving, light-polluting data center anywhere near our town, or any others for that matter. The strength of rural America has never come from its big industrial footprints.

311
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It comes from generations of people, open spaces, local business, and the collect- connection to the land." Um, da, da, da, da, da, da. "Whoever controls food and water controls the masses.

312
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Let's not allow our demise or give up control over a necessary resource in the US, and especially Abbott." What's funny is nothing about electricity, nothing about, like, what these things are being used for.

313
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Being posted on Facebook, it's wild to me that the issues are water, land, and light pollution. Um, all of which, if you were to pull up the numbers, are pretty dim- like, pretty minuscule.

314
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Um, but they're those things that like fit- Also just like an incredible the South will rise rallying cry there with, like, the whoever controls the food and the water controls the masses.

315
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[laughs] Yeah, but, but think about it, like, how am I gonna write, um, you know, a solo, uh, acoustic guitar song s- you know, singing, you know, sung to 20,000 people all smoking doobies about, like, you know, the duck curve or, uh- [laughs]...

316
01:00:06.932 --> 01:00:15.062
about [laughs] interconnection queues? Or, or the nuances between- No... actually closed loop cooling uses- [laughs]... very little water compared to a vacuum cooler. No, you can't do it.

317
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You can't be like, "Well, technically you've got, you know, uh, you, you've, uh, you've, you've got the utility and you've got the, the, you know, FERC at the federal level." It, the, exactly.

318
01:00:25.642 --> 01:00:33.992
The fact that he didn't mention electricity prices just confirms that most people think that electricity comes from the light switch. You know, it's like- It, well, it does...

319
01:00:34.022 --> 01:00:48.801
people, people walk into their, to their kitchen, turn it on, and the electricity is in the light switch, which, like, I'm just, I'm joking about the sense that people don't actually think about what's producing the m- the kilowatts that power their home.

320
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Yeah, the, the internet is- It's so far abstracted from their understanding of what makes their lights come on that they just don't think about it. Yeah. The internet is in the Wi-Fi and the power is in the light switch.

321
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And the thing is, like, I see this comment, um, a, this is actually a pretty common comment in a, I wish I had the, the comments linked up right now, but in the specific large Texans Against Data Centers Facebook group, there are many, many comments to the effect of- We d- we are, we don't have much water, we have all the electricity we could possibly need.

322
01:01:17.306 --> 01:01:25.486
So I don't know how you kinda, how you address that. Um, again, it's just difficult to sing songs about that. Um,

323
01:01:26.526 --> 01:01:37.545
but who's the other up and coming, not even up and coming, he's pretty established now, other country artist, um, often been called a Willie Nelson analog for those in the know.

324
01:01:37.586 --> 01:01:48.126
So if you know, you know, country artist Charlie Crockett. I feel like I'm really reaching for a deep cut here, but like there's someone watching this who like is absolutely like spinning right now.

325
01:01:48.186 --> 01:01:57.046
Charlie Crockett, a felon also for smoking weed back in 2016. South Texas alt country artist Charlie Crockett

326
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sparked a, uh, uh, a controversy, uh, coming out in opposition to Willie Nelson, uh, speaking out against data centers.

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Charlie Crockett says, quote, "It's difficult for me to take a celebrity serious railing against data centers when they're posting enough selfie videos to house one themselves."

328
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[chuckles] Charlie Crockett also in an unrelated, uh, cultural controversy, but, um, those... But he's a darling of the outlaw country world.

329
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Um, if you're not familiar, the outlaw brand is in the music business as a marketing gimmick created by new blood record executives in Nashville to repackage Waylon and Willie,

330
01:02:43.786 --> 01:02:49.926
uh, says Charlie Crockett, 'cause he's an at- he's an anti-outlaw country [chuckles] music artist.

331
01:02:49.966 --> 01:02:59.246
So I, I bring this up just to like give you the, the, you know, you have the household name of Willie Nelson, you have the real ones who like Charlie Crockett. They're, uh, feuding.

332
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And it's just weird to me that we have the singer-solo country artist, you know, up there with an acoustic guitar and, uh, and a bunch of beer and, uh, doobies, and they, uh, are... What are they singing about?

333
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They're talking about data centers. So- It makes total sense to me. Artists are the most performative people on the planet, and they will glom onto social movements as a way to increase their prestige and brand.

334
01:03:25.806 --> 01:03:28.066
I, I, I think, you know, it kinda makes sense that Willie...

335
01:03:28.146 --> 01:03:44.006
This is like the, the anti-data center protest bandwagon is like very in line with like the green movement, um, with a lot of, you know, '60s radical love and breaking down the establishment and the kind of narratives.

336
01:03:44.106 --> 01:03:56.486
To me, it makes a lot of sense. Yeah. Well, the, at least both Willie and Charlie can see eye to eye on the thing which unites us all, which is marijuana. [both laughing] Uh, not my words, both of theirs.

337
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They both, uh, are huge fans. Um, so that is the, uh, the, the totally derailed ERCOT Batch Zero, [chuckles] uh, segment. Something to keep an eye on.

338
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Like I said, hoping to have a guest on sometime soon to kinda work through some of the real-time updates to this, 'cause this, as Charlie said, this story is a moving target.

339
01:04:17.486 --> 01:04:32.086
But we will go ahead and move on to, uh, one final story here, and then get y'all outta here. This is ERON closing a $625 million acquisition of Mirantis, uh, s- uh, software to add AI cloud software to its stack.

340
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This was announced in May, I believe. We covered it on the show. But ERON was still working through the details, and it just closed this transaction.

341
01:04:42.646 --> 01:04:48.806
That's 625 million in an all-stock deal for ERON ordinary shares, no cash component mentioned.

342
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Mirantis will operate as a standalone subsidiary, so it will continue to serve an existing cust- customer base while ERON also taps it for its own AI cloud deployments.

343
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ERON is framing this strategically, saying it's its first deliberate move into the software layer, uh, per its own post on the acquisition in May.

344
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Three lay-- quote, "Three layers, one compounding advantage," end quote, according to ERON's management. And they have now more or less like a full stack here for the neo cloud model.

345
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They've got the data centers, the power, and the GPUs, and they have the software layer that sits on top of it all.

346
01:05:30.486 --> 01:05:52.166
And that software layer from Mirantis specifically, its Cordon AI platform, it's a control plane for provisioning GPU allocation and workload scheduling, performance tuning, and scaling across bare metal rollouts of GPUs, supports inference endpoints, event-driven inference, batch processing, and data sovereignty and local hosting requirements.

347
01:05:53.186 --> 01:06:02.646
Um, Mirantis has like 1,500 plus employees, or customers, excuse me, and it's also a founding independent software vendor partner in NVIDIA's AI Cloud Ready initiative.

348
01:06:03.966 --> 01:06:19.496
And ERON is framing this as kind of bringing four benefits, faster deployment on its GPU infrastructure, better operational visibility, more technical support, and just generally speaking, wider enterprise demand reach through Mirantis' connections.

349
01:06:21.046 --> 01:06:31.706
Mirantis is committed to keeping Cordon open source, um, and that commitment's kind of worth noting since it bears on whether the acquisition changes Cordon's availability to non-ERON customers.

350
01:06:31.746 --> 01:06:42.386
There might be a little bit of a competing case there for ERON's internal use versus other public facing stuff. Last thing I'll say on this, Charlie, and then I'll toss it to you for just like a third party read.

351
01:06:42.396 --> 01:07:00.106
Dave McCarthy, he's the senior vice president for cloud and edge infrastructure research at an international data corporation, characterized this as ERON chasing stickier customer relationships, going back to that fourth main benefit for enterprise networking, and recurring software and services revenue on top of pure compute sales.

352
01:07:00.786 --> 01:07:11.586
Um, his framing is that the commercial test is whether ERON can match hyperscale grade support and reliability while still offering a cost advantage over Amazon Web Services or Microsoft Azure platform.

353
01:07:12.826 --> 01:07:18.845
So just one analyst's take, but it is interesting to see ERON complete this acquisition, bring that software

354
01:07:19.910 --> 01:07:32.110
expertise in-house and specifically look at how it can use that to bolster their own network for future leases on that compute or also just turbocharge their ability to manage it for all of their customers.

355
01:07:32.710 --> 01:07:44.390
I think my quick comment is, you know, we talked about this with, I forget, a recent guest to talk about where's the value accrue along the AI stack? Um, does it accrue to the frontier models?

356
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Um, there's a strong argument that it accrues to the applications, uh, built on top. So if you want to diversify the uncertainty of where value accrues, maybe buy some software companies, maybe build some applications.

357
01:08:01.410 --> 01:08:18.610
If you're a NeoCloud, you might be providing the building and the power and the, and, you know, the rack space, but, uh, you may want to, with all the extra cash because your stock's up, also get into the app front-facing consumer game.

358
01:08:20.370 --> 01:08:31.380
Yeah, that makes sense to me. It also makes sense that Eiren would want to just get all of that expertise in-house since they are, they are networking the actual GPUs themselves. They're selling the compute out. Yeah.

359
01:08:31.510 --> 01:08:43.490
Much different than any of the other Bitcoin miners who have gone into this, into this industry. Eiren is the only one at scale that is doing full, fully vertigrated NeoCloud services.

360
01:08:44.050 --> 01:08:57.530
Everyone else is going more towards the powered shell route. Hive also doing some GPU operations as well. All right. This is day two of earnings week.

361
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Uh, we did Cipher and HUT this morning, and tomorrow, Wednesday, we've got Terawulf, Riot, and Galaxy back to back to back right at the start of the day, starting 8:00 AM Central.

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01:09:10.290 --> 01:09:24.650
We'll be broadcasting these onto our platforms. Then for the live stream tomorrow, we have Patrick Fleury, CFO of Terawulf, who will be talking about, of course, Terawulf's latest announcements.

363
01:09:25.150 --> 01:09:33.110
Again, this is a packed week. This is just the schedule for this week. Next week, we'll also have a lot of earnings.

364
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On Thursday of this week, we have CleanSpark and Mara, and then on Friday, we have Core Scientific with an interview with Asher Ganut, CEO of HUT 8.

365
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Thank you for listening to Blockspace Live Compute's daily show covering AI, data centers, markets, and emerging technology. This show is brought to you by CleanSpark, NASDAQ-listed ticker CLSK. I'm Charlie.

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I'm Colin, and one quick thing, tomorrow's stream will be at 12:00 PM ET. Yes, bump it up one hour, so you'll be awake anyway because, uh, you'll have gotten up early for those, uh, [laughs] earnings calls.

367
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For those 10-Qs. I will be. Sweet, sweet, fresh 10-Qs, bud. Yeah, [laughs] fresh 10-Qs. All right, see you all tomorrow. [upbeat music]