Bitcoin Mining vs. HPC: CleanSpark's Controversial Pivot Under New Leadership!

WEBVTT
00:00:00.059 --> 00:00:04.772
Hey guys, welcome, or welcome back to the channel McNally Money, the official home of power mining analysis.
00:00:04.772 --> 00:00:13.490
In today's episode, anthony Power and I are going to be following up on more news coming out of the SALT conference or the Wyoming Blockchain Symposium.
00:00:13.490 --> 00:00:25.559
Some big speeches being made over the last few days, including from the new CEO, matt Schultz of CleanSpark, hinting at a potential strategy shift, along with some comments from the president's son himself.
00:00:25.559 --> 00:00:28.989
We're going to be talking about all of that in today's presentation.
00:00:28.989 --> 00:00:30.763
Before we get into it, take a second.
00:00:30.763 --> 00:00:32.231
Smash the like button, guys.
00:00:32.231 --> 00:00:33.740
Big help to myself in the channel.
00:00:33.740 --> 00:00:44.570
If you're not already subscribed McNally money, feel free to join and let us know in the comment section below what you make of this apparent strategy shift at clean spark and if you're currently holding shares.
00:00:44.570 --> 00:00:47.335
With that being said, let's get into today's video.
00:00:47.335 --> 00:00:58.264
Alright, guys, away we go.
00:00:58.384 --> 00:01:00.188
A fun podcast for you today.
00:01:00.188 --> 00:01:04.647
We decided, since Bitcoin and the miners are in the red, we're not even going to show them today.
00:01:04.647 --> 00:01:06.090
We'll wait for a green one there.
00:01:06.090 --> 00:01:10.671
But we do have some interesting comments and discussion coming out of the SALT conference.
00:01:10.671 --> 00:01:14.730
So yesterday we talked about the Wyoming Blockchain Symposium.
00:01:14.730 --> 00:01:17.429
This looks like an extremely high-end event.
00:01:17.429 --> 00:01:20.147
We have definitely got to get on the guest list for this one.
00:01:20.147 --> 00:01:33.025
Next year, anthony, we're heading out to New York for the HC Wainwright Conference, but this one here a lot of headline speakers, a lot of big announcements, and that's what we're going to be double clicking on in today's presentation.
00:01:33.025 --> 00:01:43.343
So we've got Eric Trump and some of the Trump son's comments in store for you, but where we wanted to start is actually with our good friend Matt Schultz and CleanSpark.
00:01:43.343 --> 00:01:46.191
So he was presenting at the SALT conference.
00:01:46.191 --> 00:01:51.911
We've got a clip here as well, and this one actually stirred up quite a commotion on social media.
00:01:51.911 --> 00:01:57.049
So before we get into the clip, anthony, I wanted to get your overarching thoughts here.
00:01:58.542 --> 00:02:00.188
Yeah, this is an interesting stance.
00:02:00.188 --> 00:02:09.931
I mean we covered the sort of resignation of Zach in a previous podcast and, to be honest, we didn't see it wholeheartedly coming that one.
00:02:09.931 --> 00:02:25.085
I mean, you know, zach's been running the company now as CEO for a number of years and, to be honest with you, as an operation and to be honest, from an operating standpoint, they're pretty much up there in the top three or four minors and no one's going to doubt that.
00:02:25.085 --> 00:02:37.323
And we've managed to have the opportunity to meet Zach and Matt at many conferences in the past and get the opportunity to have a discussion with them, and actually Matt's been on the podcast as well.
00:02:37.323 --> 00:02:45.801
So we've got to know them a little bit better than maybe some of the other minors and understand what they're trying to do.
00:02:45.801 --> 00:02:53.322
And it was fairly clear from Matt's discussion in that panel that they've had a change of thought.
00:02:54.183 --> 00:02:55.628
Yeah, they most definitely have.
00:02:55.628 --> 00:03:03.388
Now we've seen HPC AI creep into the Bitcoin mining sector extensively over the last probably 18 months.
00:03:03.388 --> 00:03:14.183
Gradually we've seen more and more miners kind of succumb to the fact that HPCAI does offer significant margins and the opportunity to monetize these megawatts.
00:03:14.183 --> 00:03:17.792
We have even seen some of the other companies change their stance.
00:03:17.792 --> 00:03:27.472
So Riot was a good example of that, coming to the table a little bit later than maybe some of the other players, obviously, with their big HPC offering at Corsicana or Rockdale.
00:03:27.472 --> 00:03:32.348
So before we get much more into the discussion, let's play the clip here from Matt Schultz.
00:03:32.348 --> 00:03:34.247
This is the SALT conference clip.
00:03:34.247 --> 00:03:45.990
That really did cause quite a commotion or discussion on social media, as, again, cleanspark has really made their stance as the final peer play miner in the sector.
00:03:45.990 --> 00:03:52.582
So we'll go ahead, we'll listen to Matt and then we'll get our thoughts there To the point about AI.
00:03:53.403 --> 00:04:16.091
I think the next logical step that you'll see and that our team we've got a pretty sophisticated team of AI guys led by Taylor Monig, sophisticated team of AI guys led by Taylor Monig but I think what you'll see is that some of those, some of the infrastructure that we have that makes more sense and gives us a higher ROI per megawatt than Bitcoin mining currently does.
00:04:16.091 --> 00:04:17.536
We're certainly analyzing those very actively.
00:04:18.362 --> 00:04:32.305
So now that we've listened to that perspective, anthony, I wanted to pick your brain a little bit, because, listening to this commentary, as you just said, quite a 180 from what we actually heard in person at the Bitcoin conference in Amsterdam last year.
00:04:33.427 --> 00:04:38.083
It is and let's be honest, I mean, what have they been advocating for the last few years?
00:04:38.083 --> 00:04:41.329
They are America's Bitcoin miner.
00:04:41.329 --> 00:04:53.201
I think they've even copyrighted the slogan, so it sticks for that company, and they were, until recently, one of the you know, the last two companies to go down the route of staying pure play.
00:04:53.201 --> 00:05:01.625
We've seen Mara now start to pivot and now we've seen as Matt has moved into that chair of CEO also.
00:05:01.625 --> 00:05:09.300
Now consider that you know, if they have sites that are suitable, they'll look at it from a return on investment perspective.
00:05:09.300 --> 00:05:12.850
If it drives a better deal, then they'll do it.
00:05:14.300 --> 00:05:18.565
The issue will be and this is not just about Cleanspot, this is about a number of miners.
00:05:18.565 --> 00:05:22.105
I mean, if we look how many public miners are out there, there's probably over 30 still.
00:05:22.105 --> 00:05:38.033
Even though we've seen some um m&a activity, there's still a considerable amount of miners in the space and and if we're saying now that effectively all of them are pivoting towards hpc, I firmly believe that not all of them will make it in hpc.
00:05:38.033 --> 00:05:46.713
This is the different um beast altogether from from bitcoin mining um and you have to think there's a lot more involved.
00:05:46.713 --> 00:05:51.930
I mean Bitcoin mining is effectively, you build your basic infrastructure.
00:05:51.930 --> 00:06:03.187
You buy your machines and you plug them in and that's about it, and then you monitor the performance and you don't need anyone selling the business.
00:06:03.187 --> 00:06:05.151
It's just an operating business.
00:06:05.151 --> 00:06:10.728
Once we go into HPC, it's a whole ballgame and you've got to have sales teams.
00:06:10.728 --> 00:06:26.913
You've got to have staff that are experts in delivering HPC and as much as the reputation of Taylor Moneg in the Bitcoin mining industry, he's not a HPC expert, so they'll have to bring an equivalent of him in just to manage HPC.
00:06:27.540 --> 00:06:32.653
When you think about it, let's go back and just listen to what Zach said literally 10 months ago.
00:06:33.581 --> 00:06:34.783
Yeah, I'm glad you brought that up.
00:06:34.783 --> 00:06:37.230
I think you brought your camcorder to this one, anthony.
00:06:37.230 --> 00:06:39.769
You got some footage here, so we'll dig into the archives.
00:06:39.769 --> 00:06:52.589
This was the keynote presentation from Zach in Amsterdam last year when specifically addressing the AI or HPC opportunity, so we'll listen to this one again, then I'll get our commentary.
00:06:53.120 --> 00:06:58.093
You have said some things about AI, but what is your approach at the AI boom?
00:06:58.093 --> 00:06:59.706
Are you taking advantage of it at all?
00:07:01.060 --> 00:07:05.644
You know, what we have said is that we're not pursuing it, but there's a reason.
00:07:05.644 --> 00:07:10.050
The reason is that, again, strategy over a headline.
00:07:10.050 --> 00:07:15.572
If we're going to do something with AI, it's because we're committed to something.
00:07:15.572 --> 00:07:19.326
There will be a plan, there will be a customer.
00:07:19.326 --> 00:07:24.749
On the other side, there will be a business, and I think that's the number one thing that is getting overlooked.
00:07:24.749 --> 00:07:26.702
Bitcoin miners have no customers.
00:07:26.702 --> 00:07:28.492
It's a great business, and I think that's the number one thing that is getting overlooked.
00:07:28.492 --> 00:07:29.156
Bitcoin miners have no customers.
00:07:29.156 --> 00:07:29.619
It's a great business.
00:07:29.619 --> 00:07:29.819
I love it.
00:07:29.819 --> 00:07:36.007
Our customers is the algorithm and everyone that uses Bitcoin, but we don't sell anything.
00:07:36.007 --> 00:07:37.747
We don't have to do any of that.
00:07:37.747 --> 00:07:41.711
There's no administrative part where you have to take customer support calls.
00:07:41.711 --> 00:07:44.468
When you run a data center, you have all of that.
00:07:44.468 --> 00:07:52.221
You need a sales team, you need all these pieces, so it should never be underestimated the effort it's going to take to do that.
00:07:52.803 --> 00:07:54.427
So this is where it gets interesting.
00:07:54.427 --> 00:08:02.502
Now, obviously, you guys can see a polar opposite stance here when we listen to Zach saying, yes, we're aware of the opportunity, we're not interested.
00:08:02.502 --> 00:08:05.552
Citing exactly what you just mentioned, anthony.
00:08:05.552 --> 00:08:07.276
They don't have the sales capability.
00:08:07.276 --> 00:08:09.822
It's a different fundamental operating structure.
00:08:09.822 --> 00:08:18.572
He even goes into talking about the customer service components of this and, obviously, the infrastructure or portfolio side of it, which we'll come on to.
00:08:19.220 --> 00:08:22.968
That's quite stark contrast to what we just heard from Matt Schultz.
00:08:22.968 --> 00:08:26.723
So the question now is stark contrast to what we just heard from Matt Schultz.
00:08:26.723 --> 00:08:33.524
So the question now is, in terms of Zach's departure, who was in the AI camp, who was in the HPC camp and, ultimately, where will CleanSpark go from here?
00:08:33.524 --> 00:08:37.221
So now that we've set the stage, I'll flip it back to you, anthony.
00:08:37.221 --> 00:08:44.465
We've seen some big names on social media some of the Iron Bulls, franz Baker, our good friend Rex Finance.
00:08:44.465 --> 00:08:57.969
They've dug into the archives as well and actually found some interesting tweets talking about uh, if clean spark were to pivot like this or make a 180, what some investors, like rex, for example, would feel about that?
00:08:59.051 --> 00:09:06.232
yeah, I mean, um, I've seen the tweets myself and, uh, you know, rex obviously, obviously is very much a bull when it comes to CleanSpark.
00:09:06.232 --> 00:09:09.830
He only generally reports on CleanSpark.
00:09:09.830 --> 00:09:11.788
He does all his videos on CleanSpark.
00:09:11.788 --> 00:09:19.065
So if you want information on CleanSpark, I'd recommend people go and listen to Rex's videos, because he does do a deep dive.
00:09:19.065 --> 00:09:21.105
Let's be honest, he does a lot of work for them.
00:09:21.105 --> 00:09:28.669
He might not be getting paid by the company, but he probably should be on the amount of social media output he puts out there.
00:09:29.451 --> 00:09:38.445
And you know, we also see the same from frams in terms of iron as well, because he's an iron bull and he's been doing that for for quite a while as well.
00:09:38.445 --> 00:09:51.482
Um, maybe not as long as I have, because I've been in the space, you know, since dan rang me when they IPO, which is probably three and a half years ago, nearly four years so I've probably got a little bit of a head start on some of those iron balls.
00:09:51.482 --> 00:09:55.660
But it's great to see people come into the space and they do a lot of good work.
00:09:55.660 --> 00:10:21.269
Franz and Mbaisam and Kama Sutra and many others do a sterling job and they really dig in deep, and so you know, you can see this little tête-à-tête with regards to the tweets, and now we've seen this turnaround from Matt Schultz you know the CEO and the chairman of the company saying that you know they will now consider where opportunities lie.
00:10:21.841 --> 00:10:53.525
That to me looks like a 180 pivot, and Franz is not letting that one lie down with Rex for any moment in time and he's basically saying now you're going to have to start selling your clean Spark shares and doing what you originally said, which was purchase Cypher, because even Rex suggested and actually Rex isn't the only one that suggested this many of the insiders in the industry believe that Cypher are one of the best miners in place to deliver HPC, and this goes back to my point.
00:10:53.525 --> 00:10:56.950
Not everyone's going to win doing this strategy.
00:10:56.950 --> 00:11:00.309
It's very costly compared to mining.
00:11:00.309 --> 00:11:02.106
You're going to have to get capital raised.
00:11:02.106 --> 00:11:12.052
You're going to have to go through that process of negotiation negotiation and that's not going to take a week or so, as you see retail investors expecting it to take.
00:11:12.052 --> 00:11:18.671
It's a conversation over the table and we'll shake hands at the end of the day with this big 10 billion deal for the next 12 months.
00:11:18.671 --> 00:11:26.467
That's not happening at all and we've got some insights into how long it's actually taking some of the miners to deliver and those that have delivered.
00:11:27.330 --> 00:11:32.142
Yeah, we certainly do, and that's where we wanted to start digging in on our own analysis here.
00:11:32.142 --> 00:11:45.071
So, whether or not Ben does sell his CleanSpark and go to Cypher, the fact is that even some of the strongest CleanSpark bulls identified the fact that this is maybe not the best fit for CleanSpark's portfolio.
00:11:45.071 --> 00:11:55.711
Now, as you say, hpcai is no easy game to play in and it's not probable that every single company entering this space will be successful.
00:11:55.711 --> 00:12:05.979
So, in our opinion, or based on our analysis here, we've identified three potential concerns for CleanSpark, if they do make this transition.
00:12:05.979 --> 00:12:11.097
So the first one here is going to be the makeup of their sites within the portfolio.
00:12:11.097 --> 00:12:18.350
The third is going to be the internal bench strength or expertise, similar to what you just talked about with an iron or a cipher.
00:12:18.350 --> 00:12:20.758
And the third point is going to be the timing.
00:12:20.758 --> 00:12:26.937
So, as we've heard from individuals like Patrick Fleury, for example, from Terrawolf we've got a clip.
00:12:26.937 --> 00:12:31.898
We can play you in a second here these contracts take five or six months at best.
00:12:31.898 --> 00:12:49.120
They're hundreds of pages long, and the fact that we now have 10 or 12 other miners ahead of CleanSpark in line, or essentially their last out of the gate, could present a challenge as they're going through this contract process, so that's basically what we're going to be focusing on.
00:12:49.159 --> 00:12:54.402
The first topic here, anthony if we pull up the CleanSpark deck deck, this is one quarter outdated.
00:12:54.402 --> 00:12:57.009
They didn't put a deck out in this most recent quarter.
00:12:57.009 --> 00:12:59.917
You can see the makeup of their portfolio now.
00:12:59.917 --> 00:13:01.841
They do, obviously, have a ton of sites.
00:13:01.841 --> 00:13:04.500
That's great for bitcoin mining you've mentioned.
00:13:04.500 --> 00:13:05.565
They're great operators.
00:13:05.565 --> 00:13:15.192
However, when you start talking about hpcai, as we just heard, bigger is often better in those conversations with, with, with hyperscalers, are you?
00:13:15.432 --> 00:13:22.433
are you coming back with a thought that you know having large sites puts you in a strong position?
00:13:22.433 --> 00:13:31.697
Or we've seen some miners starting to switch to sort of like more, sort of like 50, 60 megawatt niche amounts there and then growing from that position.
00:13:31.697 --> 00:13:38.916
What do you see as, from their perspective, what they're looking for out there Is big, better, effectively.
00:13:39.677 --> 00:13:40.561
Yeah, big is still better.
00:13:40.561 --> 00:13:47.144
I mean, look, there's some people out there saying hey, they're looking for gigawatt plus sites at a minimum.
00:13:48.071 --> 00:13:49.998
And you know there aren't that many of those right now.
00:13:49.998 --> 00:13:53.080
So once that can scale and expand to that.
00:13:53.330 --> 00:13:56.615
But look, we still see demand for a lot of demand for that sub.
00:13:56.615 --> 00:14:00.480
Call it 250 to 500 megawatt site.
00:14:01.214 --> 00:14:15.350
We have heard some of the miners looking to do smaller deals, and when I say smaller deals, that's like 50, 60 megawatts of compute power plus maybe another 20, 25 megawatts of ancillary power supporting that there.
00:14:15.350 --> 00:14:22.094
Now, when you go to the, the slide presentation, clean spot showing their sites, some alarm bells come out straight away.
00:14:22.094 --> 00:14:25.403
I mean at wyoming, they've got two sites there, 110 megawatts.
00:14:25.403 --> 00:14:42.214
That's not really going to cover hpc in terms of size, unless it's very small and they want to do like a tier three data center similar to what Hive or BitDish are doing, and then have the sales team try to sell time through that sort of facility.
00:14:42.214 --> 00:14:46.102
That's not really what the big miners are looking to do.
00:14:46.850 --> 00:14:52.701
Tennessee 13 sites totaling 234 megawatts Again can do the maths.
00:14:52.701 --> 00:14:54.624
That's tiny, that you know.
00:14:54.624 --> 00:14:55.972
And again you're going to have what?
00:14:55.972 --> 00:14:58.240
10, 12 megawatt hpc sites.
00:14:58.240 --> 00:14:59.504
That's not going to cut it.
00:14:59.504 --> 00:15:01.894
Georgia's actually probably slightly different.
00:15:01.894 --> 00:15:03.761
It's got 12 sites, 508 megawatts.
00:15:03.761 --> 00:15:08.679
We know the sandersville site is quite significant and we've got some photographs to show you in a second about that one there.
00:15:08.679 --> 00:15:12.682
Mississippi forget mississippi five sites total in 63.
00:15:12.682 --> 00:15:14.355
They're all tiny sites there.
00:15:14.355 --> 00:15:27.363
That's, you know, bitcoin mining and let's put this in perspective Clean Spark have done an exceptional job in going out into rural areas and delivering Bitcoin mining to where, into places where it's very welcome.
00:15:27.363 --> 00:15:31.081
But in honesty, you know even the Sandersville site there.
00:15:31.081 --> 00:15:33.639
You know we'll look at the picture right there.
00:15:33.639 --> 00:15:39.375
It's a very basic Bitcoin mining site Compared to some of their peer miners.
00:15:39.375 --> 00:15:44.303
Let's take a look at the Sandersville site because we've got a nice photograph of it here.
00:15:44.951 --> 00:15:48.756
Yeah, in this deck they did have a capital stewardship slide.
00:15:48.756 --> 00:15:50.099
That shows Sandersville.
00:15:50.099 --> 00:15:51.059
You're right, anthony.
00:15:51.059 --> 00:16:04.190
Even compared to some of the facilities we've been to, like a Denton or a Corsicana most definitely some of these newer sites it does, I guess, not necessarily compare on the infrastructure, quality or caliber of build.
00:16:04.190 --> 00:16:10.062
Now, that being said, obviously they are able to retrofit, they are able to knock that down.
00:16:10.062 --> 00:16:25.682
But looking at this image, image a couple other things that pop out to me in terms of size of site, not necessarily megawatts, but acreage or footprint of the site again lacks in comparison to some of the scale these other miners are able to achieve.
00:16:25.682 --> 00:16:37.337
You also look at the proximity to infrastructure, water, some of those variables as well high-speed fiber latency, redundancy there's a lot of variables here.
00:16:37.337 --> 00:16:45.971
As we start to look across these other investor decks and these other portfolios that I just don't feel are necessarily in place at this point.
00:16:46.692 --> 00:16:54.241
That's a good point, bryce, and just to add to that, a lot of these other miners have brought in companies to do evaluations of the sites already.
00:16:54.241 --> 00:17:09.125
So, again, this is something that CleanSpot can't have done, because, at the end of the day, they're just literally now turning their strategy towards high performance compute or towards the best strategy to deliver the best return for its investors.
00:17:09.125 --> 00:17:10.413
We must be clear about that.
00:17:10.413 --> 00:17:11.980
It needs to be the best return.
00:17:11.980 --> 00:17:14.905
So if HPC is the best return, that's something I'll be focusing on.
00:17:14.905 --> 00:17:23.651
But you're quite right, you need to have a number of you know supporting services to deliver high performance compute.
00:17:23.651 --> 00:17:27.193
It's not just like the Bitcoin mining setup we talked about earlier.
00:17:28.015 --> 00:17:30.939
No, it's certainly not, and even Zach alluded to the fact.
00:17:30.939 --> 00:17:40.090
You also need a whole new team behind you, not only the IT experts to build the data center, but you need the sales experts to actually fill the GPU space.
00:17:40.090 --> 00:17:47.842
You need managerial staff, you need customer service support, you need loyalty retention agents or components of the company.
00:17:47.842 --> 00:18:00.271
So now, if we start to look at some of these other players who've landed successful deals again, many of these companies, specifically in Core Scientific, have been at the negotiation table for years at this point.
00:18:27.434 --> 00:18:30.897
But if we look at their portfolio here, whether we're talking about Cypher, core Scientific, riot some of the consistencies I see, anthony large scale.
00:18:30.897 --> 00:18:33.519
They're located to large urban areas, they have access to fiber water and, of course, huge partials of land.
00:18:33.519 --> 00:18:39.244
We're talking hundreds and hundreds of acres, with many of a large site that CoreWeave have got to develop for that partnership with CoreWeave and that's 400 megawatts.
00:18:39.244 --> 00:18:40.125
We've been to that site.
00:18:40.125 --> 00:18:58.971
It was 150 megawatts Bitcoin mining site when we were there and during that visit there it was sort of slipped out that this potentially was going to be the HPC site, be the HPC site, and we kept that quiet until the announcement came out, probably 12 months later, that Denton was going to be the flagship HPC site for Core Scientific.
00:18:58.971 --> 00:19:16.180
But again, you look at looking around all the other sites 100 megawatts, 150 megawatts, 200 megawatts these are big sites and this supports what Jeff LaBerge was saying from Bitdeer big is better and we see this across the board in a number of the other miners too.
00:19:17.082 --> 00:19:18.002
Yeah, we certainly do.
00:19:18.002 --> 00:19:21.747
You can see some of Cypher's properties, up to 500 megawatts.
00:19:21.747 --> 00:19:25.770
Obviously Barbara Lake on the agenda for next year and Black Pearl.
00:19:25.770 --> 00:19:32.301
But they've got even deeper inventory which again is maybe one of the reasons Ben indicated he would buy Cypher over CleanSpark.
00:19:32.301 --> 00:19:35.344
Now you mentioned some of these feasibility studies.
00:19:35.344 --> 00:19:38.164
We've seen that done Altman Salon, with Riot.
00:19:38.164 --> 00:19:40.903
We just saw an impressive one out of BitFarms as well.
00:19:40.903 --> 00:19:48.344
Again, you can see their locations hundreds of megawatts in Pennsylvania, 170 here in Canada, quebec.
00:19:48.875 --> 00:19:53.507
The other visual they say a picture says a thousand words I wanted to bring up.
00:19:53.507 --> 00:20:04.365
If you look at the Rockdale site you keenly identified Anthony, in the bottom left you can see some groundworks being prepared there, diggers, excavators on site.
00:20:04.365 --> 00:20:07.538
You can also see the scale, you can see the water.
00:20:07.538 --> 00:20:09.385
You can see the type of buildings.
00:20:09.385 --> 00:20:16.566
If I look at this image again, this is Rockdale, so not even Riot's flagship facility, corsicana.
00:20:16.566 --> 00:20:21.287
This is essentially their second HPC potential offering.
00:20:21.287 --> 00:20:27.582
They don't have a client yet, so they've already started all this feasibility and have still yet to sign one.
00:20:27.582 --> 00:20:29.595
If I take that into consideration.
00:20:29.595 --> 00:20:32.285
I look at this image next to Sandersville.
00:20:32.285 --> 00:20:35.545
It's difficult to see the correlation there.
00:20:37.037 --> 00:20:37.941
They're chalk and cheese.
00:20:37.941 --> 00:20:44.387
You know the Rockdale facility is the largest mining site in the world, currently with full power.
00:20:44.387 --> 00:20:51.105
You know Corsicana has the ability to get to one gigawatt but it's only got 400 megawatts energized at the moment.
00:20:51.105 --> 00:20:58.717
So they still haven't switched the power on for the remaining 600 megawatts and they'll be doing that as they sign up a deal for that one there.
00:20:58.717 --> 00:21:12.021
But rockdale facility has 700 megawatts already and you can see from that photograph there there is no doubt whatsoever that riot are preparing this for the next two years to go into hpc.
00:21:12.021 --> 00:21:30.425
They know as well as I know that the Bitcoin mining has probably got another couple of years left to run and they're getting all their ducks in a row to move into this new industry which has got longevity, not reliant on any volatility of a Bitcoin price.
00:21:31.215 --> 00:21:34.305
People go back 30 years ago with the World Wide Web.
00:21:34.305 --> 00:21:35.839
Will it ever catch on?
00:21:35.839 --> 00:21:42.066
Well, it did catch on, and AI, from what we've seen already, is the future.
00:21:42.066 --> 00:21:53.407
You know we're using it in our everyday life at the moment, probably very, very small amounts, but the ability for that to grow will mean that we'll need more of these sites.
00:21:53.407 --> 00:21:59.380
So it's clear as day that Riot are, you know they'll be progressing.
00:21:59.400 --> 00:22:17.847
The Rockdale facility That'll be included in the conversations there it's not even operating at optimum power in terms of mining at the moment there, so they're not utilizing all the power because they're only delivering, you know, a smaller amount of um of of bitcoin mining than they are at the corsicana site.
00:22:17.847 --> 00:22:22.250
So they could probably, you know, start even refurbing some of those buildings.
00:22:22.250 --> 00:22:23.516
Uh, you know, very, very quickly.
00:22:23.516 --> 00:22:26.323
But look at the water there, look at the size of the space.
00:22:26.323 --> 00:22:29.919
There's plenty of space all around that site there to grow out.
00:22:29.919 --> 00:22:34.188
And one thing thing about Riot is even at Corsicana site, that's an enormous site.
00:22:34.188 --> 00:22:41.540
They've just gone and bought a massive parcel of land next to it, so they have that ability to cover the additional requirement.
00:22:41.540 --> 00:22:46.601
When you do implement HPC, this is not putting a building up on a field and shoving some miners into it.
00:22:46.601 --> 00:22:51.761
There's a lot more involved, a lot more requirements, and it has to meet all those conditions to run a good service.
00:22:52.644 --> 00:22:53.727
Yeah, it certainly does.
00:22:53.727 --> 00:23:00.305
And again, we're by no means saying CleanSpark can't get there, we're just saying at this point in time, definitely some hurdles ahead of them.
00:23:00.305 --> 00:23:15.434
Now, in terms of the staffing side of things, we've also seen a number of key appointments, announcements, both internal executives being hired, directors, board members, consultants, third-party firms like Tier 5 or T5 data centers.
00:23:15.434 --> 00:23:21.949
So all of that, again, not saying Matt and team are unable to do it, but we've heard there's a long lead time.
00:23:21.949 --> 00:23:28.628
These are very limited or exclusive skill sets that these people have and they're in very high demand.
00:23:28.628 --> 00:23:31.704
So it's going to be difficult from a timing perspective.
00:23:31.704 --> 00:23:35.018
Very high demand, so it's it's going to be difficult from a timing perspective.
00:23:35.038 --> 00:23:41.818
Uh, patrick flurry actually made that specifically clear in his discussion at the salt conference as well again, a great one to be at, if, if we could ever get there.
00:23:41.818 --> 00:23:49.882
Uh, talking about the fluid stack and google contract they just announced saying if the stars align, things go.
00:23:49.882 --> 00:23:53.009
You're talking four or five months.
00:23:53.009 --> 00:24:02.584
And Terrowolf again already had their foot in the door with some of this HPC activity, with the Wolfden or that trial data center they had set up.
00:24:02.994 --> 00:24:09.994
Yeah, and we've seen other CEOs suggest that even five months is very, very optimistic, should be even longer for these discussions.
00:24:09.994 --> 00:24:12.705
We're talking about leases, we're talking about contracts.
00:24:12.705 --> 00:24:13.394
We're talking about contracts.
00:24:13.394 --> 00:24:23.689
We're talking about terms in terms of length of contracts, with options to increase that, and these will be thousands and thousands of page documents and all about.
00:24:23.689 --> 00:24:26.538
You know, a payment mechanism, how to deliver a service.
00:24:26.538 --> 00:24:31.218
You know, or you know, if you don't deliver, as to the document like that, who pays who?
00:24:31.218 --> 00:24:33.464
So there's, there's so much involved.
00:24:33.875 --> 00:24:44.464
This is not like a two-day sat around the table and if you're going to these discussions with a hyperscaler, you want to make sure you've got the best team around you.
00:24:44.464 --> 00:24:49.115
This is not the CEO and the CFO only around the table.
00:24:49.115 --> 00:24:53.826
This will be a team of 25, 30 people, experts in all those areas.
00:24:53.826 --> 00:25:03.815
So if one question is asked, the CEO will point to the person responsible for that area and say respond to that there, as my expert, you know, in that particular area, there.
00:25:03.815 --> 00:25:11.981
So all the experiences around the table there, led by the CEO of the company, and that's what would probably happen.
00:25:11.981 --> 00:25:19.858
I've been involved in the UK in some of these big meetings with big builders and you want to make sure you've got the best team available and it does work.
00:25:19.858 --> 00:25:23.215
And I spoke to Adam Sullivan about this and he said, yeah, the meetings.
00:25:23.215 --> 00:25:32.049
They went to 25 to 30 people from core scientific attending those meetings, including the people that were going to build the infrastructure.
00:25:32.049 --> 00:25:36.672
And you know we've already seen Ben Gagnon last week say exactly the same thing.
00:25:36.672 --> 00:25:45.711
They just signed up with T5 data centers and they'll be going to the meetings because they've built some of the biggest data centers in North America.
00:25:45.711 --> 00:25:51.923
And when you've got a reputable company sat on the table next to you, it means there's less questions to ask.
00:25:51.923 --> 00:25:56.886
Your reputation already precedes you and that's more like a box-ticking exercise.
00:25:57.269 --> 00:26:09.182
Clean Spark are going to have to gather a lot of this now and see what's available and also have a long look at what they've got in terms of sites and how much they could actually turn into HPC.
00:26:09.182 --> 00:26:10.105
They've got a lot of power over one gigawatts.
00:26:10.105 --> 00:26:10.928
That slide is slightly out of dateC.
00:26:10.928 --> 00:26:13.075
They've got a lot of power over 1 gigawatts.
00:26:13.075 --> 00:26:14.821
That slide is slightly out of date there.
00:26:14.821 --> 00:26:19.666
They've announced since then that they've over 1 gigawatt in their July update.
00:26:19.666 --> 00:26:28.126
But we can clearly see when you've got 34, 35 sites, the majority operating at 10 or 12 megawatts.
00:26:28.126 --> 00:26:45.798
That's not going to be utilized for these big co-location deals that the likes of Terrawolf, the likes of Core Scientific, the likes of Galaxy Applied Digital have already landed, and the expectation is we'll see Riot, cypher, iron, bitfarms land similar deals as we go through the remainder of the year.
00:26:46.259 --> 00:26:58.747
Yeah, time will tell, as we like to say here, anthony, and again, we're looking forward to seeing the next official presentation or discussion with Matt Schultz to look at how CleanSpark is going to position themselves.
00:26:58.747 --> 00:27:12.423
The trouble for me, again, as an investor in this company, whether I think about fleet efficiency, fleet size, hpc, I just don't see where CleanSpark is truly excelling or number one in the sector right now.
00:27:12.423 --> 00:27:16.425
But again, not to be said that things can't change Now.
00:27:16.425 --> 00:27:20.770
I did want to quickly play that clip from the CFO of Terawolf, patrick Fleury.
00:27:20.770 --> 00:27:22.051
Patrick's been on the channel.
00:27:22.051 --> 00:27:33.747
We think very highly of him, but a great way to end this segment and hear exactly what we just said about the difficulty, the specifics and the time length of these contract negotiations.
00:27:34.715 --> 00:27:36.923
Like electrical infrastructure, doesn't move quickly.
00:27:36.923 --> 00:27:44.214
You know tech is used to moving quickly and breaking things, but these deals take an extremely long time to come together.
00:27:44.214 --> 00:28:00.914
It took us from soup to nuts with Google and Fluidstack four to five months of very intense due diligence, fluid stack four to five months of very intense due diligence, and then you know getting a.
00:28:00.914 --> 00:28:04.598
I would break these deals down into two aspects.
00:28:04.598 --> 00:28:12.403
One is you have to sign a lease and the lease is very complicated in and of itself and then, as soon as the lease is signed, the team turns to me and Solomon and the rest of us up here and says how do we finance this?
00:28:18.855 --> 00:28:30.523
So, now that we've heard from Terrewolf, a few other notable speakers or statements at the conference again taking place in Wyoming, eric Trump, the president's son himself this is really interesting how involved this family is becoming in the cryptocurrency world.
00:28:30.523 --> 00:28:44.048
Eric Trump taking to the stage on multiple occasions, number one stating that countries are now accumulating Bitcoin, going on record saying he's aware of one that's quietly been accumulating 200,000 Bitcoin.
00:28:44.048 --> 00:28:52.826
Then following that up with a statement that Bitcoin, in his opinion, there will be no question in hitting a million dollars per coin.
00:28:53.796 --> 00:28:59.621
Yeah, I mean crazy 200,000 Bitcoin worth 22 billion, and they didn't tell anybody.
00:28:59.621 --> 00:29:02.061
They've just been quietly accumulating it.
00:29:02.061 --> 00:29:03.165
So that'll be interesting.
00:29:03.165 --> 00:29:05.442
He obviously knows who it is.
00:29:05.442 --> 00:29:14.566
I'm assuming you'll have people out there trying to find the wallet now with that amount in there, because there will be mechanisms to find those large wallets.
00:29:14.566 --> 00:29:16.136
But that's you know.
00:29:16.136 --> 00:29:20.508
Again, it just adds to the positive news stories we've seen on Bitcoin.
00:29:20.894 --> 00:29:29.727
You know, when we've shown the HODL 15 update of the 100 companies, those 100 companies on there are very close to a million Bitcoin in total now.
00:29:29.727 --> 00:29:30.256
Literally.
00:29:30.256 --> 00:29:43.550
Probably the next update will be over a million if the way that these companies are growing in terms of bitcoin buying, probably 25 30 of those companies literally every week are buying more bitcoin or mining more bitcoin.
00:29:43.550 --> 00:29:47.481
In the case of the mining companies, um, so that's just continued growth.
00:29:47.481 --> 00:29:49.246
We're not selling any of those bryce.
00:29:49.246 --> 00:29:50.615
So you know who is selling.
00:29:50.675 --> 00:30:09.901
Maybe, maybe a couple of those people who bought in at like, you know, when it was a dollar, a Bitcoin, maybe taking some profit off the table, but most of us aren't selling and actually most people who own Bitcoin now are pretty much in profit because it's, you know, so close to the all-time high, hasn't been much time to buy Bitcoin and make effectively a loss on it at the moment.
00:30:09.901 --> 00:30:11.423
So, uh, but that's a great.
00:30:11.423 --> 00:30:31.923
That's a great update from eric trump there, the president's son, um, I'll be keenly trying to find out who that country is, um, because we know there are some countries out there, but that's a large scale purchase there 22 billion that's significant wouldn't it be ironic if that was the united states and he covertly exposed them like that?
00:30:32.365 --> 00:30:32.926
Yeah, you're right.
00:30:32.926 --> 00:30:40.339
And if you look at the Trump media organization, they're in the top 10 holders on that table 15,000 Bitcoin.
00:30:40.339 --> 00:30:49.171
So if you multiply that out by Eric Trump's million dollar prediction, by my math that would essentially eclipse all of the Trump family wealth.
00:30:49.171 --> 00:31:00.656
Whether you're talking real estate, gold, silver investments, equities, bonds, it appears they've gone all in on crypto and, as I've said many times, I'm happy to ride those coattails.
00:31:00.656 --> 00:31:02.642
So, with that being said, it is Thursday.
00:31:02.642 --> 00:31:04.627
That means the newsletter's out tomorrow.
00:31:04.627 --> 00:31:05.998
Always free you guys.
00:31:05.998 --> 00:31:08.704
A weekly newsletter, some great insights in there.
00:31:08.704 --> 00:31:13.226
While you're on the website, take a look at Minor, minor madness 4.0 leaderboard.
00:31:13.226 --> 00:31:14.678
Kama sutra.
00:31:14.678 --> 00:31:19.788
We mentioned earlier in the presentation ranking very favorably in that competition.
00:31:19.788 --> 00:31:24.371
But shout out to all of the people on the top 10 or 15 leaderboard there.
00:31:24.371 --> 00:31:26.678
With that being said, we'll be back here tomorrow.
00:31:26.678 --> 00:31:28.260
Another great podcast for you.
00:31:28.260 --> 00:31:36.642
Let us know in the comment section below do you think clean spark will pivot into hpcai and do you think this is the right move for that company?
00:31:36.642 --> 00:31:38.207
We'll talk to you soon.