DarkHorse Technologies - CEO, Joel Block Q&A - Q3 Earnings, Sites & Strategy! の全文書き起こし

Aid from a lack of investment perspective, and all of a sudden, after about three years, this this potential merger with USB TC came uh to the table, and there was still like uncertainty because not many people had heard of USB TC or a private company. 00:04:42.800 --> 00:04:47.199 Hut Aids obviously stagnated a little bit in terms of what they were doing in Canada. 00:04:47.519 --> 00:05:00.160 And um, when we saw the uh we saw the the actual merger, um, and then obviously Asher decided to you know to put his uh stamp on and and forward there, you can see now how the progression has gone. 00:05:00.240 --> 00:05:07.040 And those two companies effectively now, I think, from market cap perspective, are probably two of the biggest that we talk about on a daily basis. 00:05:07.120 --> 00:05:27.439 So you can go from an acorn into a tree, and so I mean it's great to to get you on the show today, but I mean just give us an overview in terms of um what Dark Horse Technologies is currently um doing in and in terms of current sites, operations, and uh what's your strategy at the moment, strategy going forward? 00:05:27.759 --> 00:05:28.240 Certainly. 00:05:28.399 --> 00:05:37.199 So we've got um four sites right now operating online, about 50 megawatts of power um and capacity that we're currently utilizing. 00:05:37.360 --> 00:05:46.639 Uh all four sites are in the TVA, the Tennessee Valley Authority power market, um, and primarily in southern Kentucky and Tennessee as well. 00:05:46.879 --> 00:05:50.000 The the sites today are being used for Bitcoin mining. 00:05:50.079 --> 00:05:54.879 We have we're not doing self-mining, we've transitioned to a hosted model for third parties. 00:05:54.959 --> 00:05:59.920 Uh, BitCear is one of our large uh clients and customers in in our sites right now. 00:06:00.160 --> 00:06:06.800 And so that that that model is to kind of bridge the gap as we work on this transformation and kind of move into the AIHPC. 00:06:06.959 --> 00:06:21.680 And we've got flexibility in those agreements so that when we have to start doing site work that may impact where the Bitcoin mining is, and we start bringing kind of the modular pods or prefab options to do the AIHPC, we'll be able to kind of turn off and transition those sites over. 00:06:21.920 --> 00:06:29.199 And then in addition to that, um, we recently announced in the third quarter uh a new 50 megawatt power agreement. 00:06:29.360 --> 00:06:36.800 The interesting thing about that opportunity is it's in the same community where we're currently operating uh a 15 megawatt data center. 00:06:36.879 --> 00:06:47.120 So it's a community that we know well, it's a local utility where we've been working with for a number of years, and they've been working hand in hand with us, and it's uh it's it's been a really nice partnership with them. 00:06:47.360 --> 00:06:51.279 The opportunity there is we're going to be building a new substation for the community. 00:06:51.439 --> 00:06:54.160 It's going to be a 65 megawatt substation. 00:06:54.240 --> 00:07:04.879 We'll get access to 50 megawatts of that power, and then 15 megawatts will be able to be used for local businesses, um, expansion on residential and the local needs that they have. 00:07:05.839 --> 00:07:08.959 Just to take that uh a stage further, sorry, uh Bryce. 00:07:09.519 --> 00:07:21.680 Um we're getting a lot of obviously a lot of commentary about uh companies in local areas and what uh what's the impact to locals area in terms of pricing for power, in terms of water. 00:07:21.839 --> 00:07:32.959 Uh what's what's uh Dark Horse doing in your locations to sort of put minds at rest uh with local uh residents and and the obviously authorities in those areas? 00:07:33.279 --> 00:07:41.920 Yeah, I think it starts with taking a proactive approach and not kind of hiding behind things and letting this misinformation kind of permeate throughout the region. 00:07:42.079 --> 00:07:45.519 Uh we we've been having a lot of town halls and active dialogue. 00:07:45.600 --> 00:07:57.600 Uh we've built a website specifically to answer questions and we gamified a little bit of it so that people of all ages and all backgrounds can kind of really understand uh the truths and the myths behind this. 00:07:57.839 --> 00:08:06.800 I think one of the things that we've been very clear on pointing out is at a local level, we have not gone in and asked for tax abatements or rebates in these local cities. 00:08:06.879 --> 00:08:22.639 And so as you think through personal property tax, both real and tangible personal property, there's gonna be significant tax revenue generated for these local communities to be able to invest in their school system and their emergency systems and in the government and those pieces there. 00:08:22.800 --> 00:08:24.560 And so I think that's been really important. 00:08:24.800 --> 00:08:38.720 I think the other thing is, you know, in that town in particular, we've had the head of that utility go on record and say the reason why your electricity rates have not risen over the last three years is because Dark Horse has been operating in our town. 00:08:38.879 --> 00:08:46.320 They've been a very good uh partner of ours, and they acknowledge that we've been a very large ratepayer as we've been running the Bitcoin mining and the hosted. 00:08:46.720 --> 00:08:56.879 And so I think that's been a big opportunity to really get out there and explain you know the truths behind this, the good, um, and what the benefit can be for the communities. 00:08:57.279 --> 00:09:03.200 Yeah, it's great to hear you guys have taken that approach from day one, and we've seen that with a lot of the companies we cover. 00:09:03.279 --> 00:09:07.200 They've been involved in these communities, whether it's in mining or hosting for years. 00:09:07.360 --> 00:09:10.559 Now it's just an evolution of that uh relationship. 00:09:10.639 --> 00:09:18.320 Now we'll get into the inference strategy, this

smaller site uh strategy in a second, because I think that's a key differentiator for Dark Horse. 00:09:18.399 --> 00:09:20.720 But before we do, Q3 highlights. 00:09:20.799 --> 00:09:23.679 You mentioned the new truck stop site or acquisition. 00:09:23.840 --> 00:09:27.679 What else uh happened or occurred during that three-month period? 00:09:28.080 --> 00:09:34.240 Yeah, the third quarter was the first full quarter where we were operating as a combined company under Dark Horse. 00:09:34.399 --> 00:09:40.879 Well, one of the major things that we did was shared up the balance sheet and made sure that we had plenty of liquidity and capital on there. 00:09:40.960 --> 00:09:54.159 Um and so between about a$5 million pipe round that we did in September that that was led heavily by myself and a couple fellow directors to support kind of the stock and the investments. 00:09:54.240 --> 00:10:00.799 Um in addition to that, we put some cash in the balance sheet by selling off a non-core site in Iowa. 00:10:01.039 --> 00:10:07.120 Um, it was a smaller site, and geographically it just didn't fit into the portfolio that we were looking to develop and expand. 00:10:07.279 --> 00:10:13.840 Um, and the third piece is we sold off a number of the self-mining Bitcoin machines that we had to put more cash in the balance sheet. 00:10:13.919 --> 00:10:18.320 And so we ended the third quarter with a pretty strong cash position on the balance sheet. 00:10:18.399 --> 00:10:27.279 And I think that was important as we make this kind of transformation and start fueling some of the growth capex on the pre-development stuff on the AIHPC. 00:10:27.440 --> 00:10:29.360 So that was kind of a major item. 00:10:29.519 --> 00:10:35.200 The second thing that occurred was um the new BigDeer hosting agreement that we announced several months back. 00:10:35.360 --> 00:10:38.480 Those machines starting to come online across our sites. 00:10:38.639 --> 00:10:45.360 And as we sit here today, now post-third quarter, all those machines are up and running and have been delivered from BitDeer. 00:10:45.440 --> 00:10:51.279 So you'll see that kind of trickle through probably into the fourth quarter and a couple quarters on the future. 00:10:51.360 --> 00:10:57.200 And again, I'll remind everyone that we we partnered with them, but we built flexibility into those agreements. 00:10:57.279 --> 00:11:02.080 And so that will not stop us from the pursuit and development of the AI and HPC. 00:11:02.240 --> 00:11:09.120 I would say those were those were the major impacts we had in addition to adding more power and power opportunities into the pipeline. 00:11:09.440 --> 00:11:19.840 In terms of that uh deal with BitD, are we talking about um some sort of a profit share agreement, or is it really more of a rental uh agreement um uh for dark horse? 00:11:20.159 --> 00:11:24.559 Yeah, no, it is it's it is has a feature of the profit share component into it. 00:11:24.720 --> 00:11:31.440 So we will maintain a little bit of um Bitcoin potential upside if hash price continues to rise. 00:11:31.600 --> 00:11:40.639 But at the same time, it it's more seen as a stabilizing effect to our current business and kind of the current cash flow margins while we work through the growth opportunities. 00:11:40.960 --> 00:11:41.360 Yeah. 00:11:41.600 --> 00:11:53.120 Hey, now we want to get into your background in terms of the capital stack here in a second, but you've talked a lot about these smaller sites, truck stop being your biggest at 50 megawatts, and then goes down from there. 00:11:53.200 --> 00:11:57.759 Uh, the website and investor materials said, hey, these are great for inference. 00:11:57.919 --> 00:12:00.799 We can probably utilize modular designs. 00:12:00.879 --> 00:12:04.159 Uh, we were wondering if it's the DSX pod architecture. 00:12:04.320 --> 00:12:14.080 Can you talk to us a little bit about your site selection, the size of the sites, and what maybe makes these different than some of those large-scale uh ERCOT or Texas properties? 00:12:14.480 --> 00:12:21.120 Yeah, I think the first thing that we've always looked at is we had the benefit of operating existing data centers in these local communities. 00:12:21.279 --> 00:12:26.320 And so as we look at expansion, um, kind of speed to power is going to be the first thing. 00:12:26.480 --> 00:12:28.879 Are they power ready and is there already power there? 00:12:29.039 --> 00:12:44.159 And there's a number of opportunities in the area where we're operating that were that are being brought to us, either by co-op utilities or potentially by private landowners or even some private Bitcoin miners that are looking to figure out how to monetize and transform. 00:12:44.320 --> 00:12:47.919 I think after that, you you want to make sure that they're in the right location. 00:12:48.000 --> 00:12:58.559 Um there's there is a lot of zoning in place already for light industrial, heavier industrial, and commercial, where we believe that a lot of these data centers should be operated and built. 00:12:58.639 --> 00:13:03.919 Um, and they really should not be uh closer to the residential areas or near the schoolyards. 00:13:04.080 --> 00:13:12.159 And I think when you do that, you you're if if you go in that direction, you're starting off on the wrong foot immediately with the local town and trying to get the approvals. 00:13:12.399 --> 00:13:19.440 I I think beyond that, um we early on said we're gonna end up doing uh a prefab or modular option. 00:13:19.679 --> 00:13:25.279 We wanted to mitigate some of the labor challenges that some of the hyperscalers are facing in these different locations. 00:13:25.440 --> 00:13:35.200 And so our philosophy has been let's manufacture the pods or units or whatever the housing of the data room is going to be off-site and then assemble it on-site. 00:13:35.360 --> 00:13:37.600 And I think there's a couple key distinctions with that. 00:13:37.759 --> 00:13:42.320 Uh,

first, they're being built in a factory that is meant for these designs. 00:13:42.399 --> 00:13:46.000 And there's already labor there with the companies that we'll be contracting with. 00:13:46.159 --> 00:13:54.960 The second is we'll still be using the local resources for skilled trades, whether it's electrical, engineering, um, and all the different subclasses of that. 00:13:55.039 --> 00:14:06.159 And so we want to make sure that we are employing local uh and building jobs and opportunities where it makes sense, but also not taxing or stretching kind of labor concerns or shortages. 00:14:06.399 --> 00:14:08.559 And so that's been a key component to this. 00:14:09.279 --> 00:14:10.399 That's good to hear. 00:14:10.480 --> 00:14:20.480 Um, in terms of that second 50 megawatts um of uh developed pipeline coming on, what can sort of investors expect in terms of milestones to achieve that? 00:14:20.559 --> 00:14:22.240 Is it going to be brought on in phases? 00:14:22.399 --> 00:14:24.960 Uh, will you get most of that on in 2027? 00:14:25.120 --> 00:14:27.360 How do you see that falling into your strategy? 00:14:27.759 --> 00:14:32.720 So the first 50 megawatts we have online today, they're already powered on. 00:14:32.799 --> 00:14:39.519 And so we're actively pursuing tenant conversations and navigating the differences as the market's evolving. 00:14:39.600 --> 00:14:44.399 Um and we would anticipate and are aiming to have those online in 2027. 00:14:44.720 --> 00:14:55.759 The second, the the truck stop, the new 50 megawatt, because we have to build the substation in partnership with the utility and the TVA approval, we're signaling that that would be a 2028 event, most likely. 00:14:55.919 --> 00:15:03.919 Um there's some things that we may be able to do to kind of pull things forward in terms of a quarter or two, but 2028 would be the time frame that we would target for that. 00:15:04.080 --> 00:15:09.679 And then the next piece to this is um people have been asking, well, what should we anticipate for build type? 00:15:09.840 --> 00:15:13.759 Is that going to be a more traditional data center because it's slightly larger or not? 00:15:13.919 --> 00:15:16.399 Uh we have not predetermined that necessarily. 00:15:16.480 --> 00:15:27.120 And I think if anything, um the willingness to move into the modular and prefab is becoming more and more kind of entrenched by both tenant types and suppliers. 00:15:27.200 --> 00:15:36.720 Um, you see a large deal last week on a powered land deal that's just under a gigawatt down in Texas, that's going to be built in the modular or prefab variety. 00:15:36.799 --> 00:15:44.320 And so I think the the key theme for us is flexibility and keeping our options open as we design that to match what a tenant may need. 00:15:46.159 --> 00:15:56.799 We haven't seen many of that sort of type of uh contract come to the market in terms of the public companies that we we highlight on a daily basis, and that's probably 18, 20

of them of the biggest names. 00:15:56.960 --> 00:16:02.879 Um, so it did sort of probably wake up uh the market in terms of what is becoming available and at what cost. 00:16:03.200 --> 00:16:21.840 I mean, I suppose with the capex costs associated with that type of build-out, um, and obviously with a company uh that has a strong balance sheet uh for the size of the company, but you are wanting to grow significantly, it sort of like maybe make makes sense to have that as an option on the table, certainly going forward. 00:16:22.159 --> 00:16:42.240 Um are you able to sort of like talk through uh you know some of the not in detail the conversation, but but uh what are you seeing in terms of over the last few months in terms of demand for the fact that you've got this 50 megawatts of power online and effectively uh can be converted, you know, at a time that you can you know determine regards to capital? 00:16:42.639 --> 00:16:49.360 Yeah, I was I would say the the conversations have only picked up steam and and the opportunities have kind of broadened. 00:16:49.440 --> 00:16:54.480 Uh, there's much larger counterparties that are speaking to us today that were not six months ago. 00:16:54.639 --> 00:17:04.000 Um, there's a number of counter counterparties in the the IG corporate rating standpoint that are talking andor potentially willing to provide some type of backstops or wrappers. 00:17:04.079 --> 00:17:07.200 And so the universe for us has definitely expanded. 00:17:07.440 --> 00:17:20.000 I also think coming out of the election, you know, about a week ago, there there's created um a bit of concern about the deliverable dates in different markets and different regions in terms of things are things going to get delayed. 00:17:20.160 --> 00:17:22.000 I think there's a lot of unknown right now. 00:17:22.160 --> 00:17:28.240 And I think in a scenario where there's a lot of unknown, people are chasing the sure thing and what where that opportunity may lie. 00:17:28.319 --> 00:17:33.599 And so we we've had a number of calls post-election, even in terms of hey, what have you signed a deal yet? 00:17:33.680 --> 00:17:34.720 Is your power available? 00:17:34.960 --> 00:17:36.000 What that could look like. 00:17:36.240 --> 00:17:47.279 I think the other thing you look at some of the other deals in the market right now is you're starting to see hyperscalers and larger tenants look at different areas of the supply chain. 00:17:47.359 --> 00:17:50.799 And I think that was a factor in the large deal that Ride announced last week. 00:17:50.960 --> 00:17:55.200 It seemed like you know, their tenant likely is going to be bringing a lot with them. 00:17:55.519 --> 00:18:06.799 And so I think the market and the dynamic is definitely shifting, and there's a willingness to kind of work almost in a partnership versus a one-sided you must deliver all, and then the other side comes and takes it over. 00:18:07.759 --> 00:18:15.119 Just to follow up on that powered land structure, the idea with Dark Horse, just to confirm, uh, you would not be operating the GPUs. 00:18:15.200 --> 00:18:22.079 You guys would have the land to power some sort of pod or modular system, but the GPUs would be operated by the tenant. 00:18:22.480 --> 00:18:24.079 I think there's one distinction in there. 00:18:24.240 --> 00:18:27.119 We we don't intend right now to own the GPUs. 00:18:27.359 --> 00:18:35.039 We may, as part of a contract, um, provide operational services, which we would outsource to a very qualified third party. 00:18:35.119 --> 00:18:37.440 And that would likely be done on a pass-through basis. 00:18:37.599 --> 00:18:52.880 So, in terms of the co-location model, absolutely, that is our plan to build up the powered shell, whatever that form of that shell looks like, bring power to those units, um, work with a tenant to get the GPUs that they own installed, and then we will figure out the operations. 00:18:52.960 --> 00:18:57.920 Some tenants are asking to operate themselves, others are looking for you to come with that solution. 00:18:58.000 --> 00:19:03.839 That is a solution that we have and we can deliver on a cost, you know, cost plus basis. 00:19:05.039 --> 00:19:15.440 Now, obviously, the key question about all of this, what we talked about, about the growth there is really the funding, and you've got a uh an experienced background in that in terms of your intro. 00:19:15.680 --> 00:19:21.359 Um, can you give us some sort of like uh you know highlights in terms of what levers are available to you? 00:19:21.680 --> 00:19:35.359 And um not that I mean you know, referring back to that deal last week where the the the the uh the the the the tenant is going to actually pay for the um for the uh the the construction and then sort of like charge back through the revenue. 00:19:35.440 --> 00:19:44.640 Uh we've had another, I think the first big deal by Core Scientific was a very, very similar thing in terms of core we pay for all the for most of the funding of that 590 megawatts. 00:19:45.039 --> 00:19:54.319 You know, is that sort of a potential lever that might you know might become available to a company that wants to obviously grow, but you know, is tied to uh you know the capital that has available. 00:19:54.400 --> 00:19:58.720 What what do you see as your funding going through this next sort of 12-18 months? 00:19:59.039 --> 00:20:06.400 Yeah, I mean, I think this is the uh the the creative problem that that myself and other leaders in this industry get to get the work to solve. 00:20:06.640 --> 00:20:14.160 And there's another there's a number of kind of templates that could work, and my guess is there's a lot more that will still evolve and develop. 00:20:14.400 --> 00:20:23.759 And I think with that, you met you mentioned one lever in particular, which is kind of what is the deposits or prepays or pre-funding that a tenant is willing to do. 00:20:23.920 --> 00:20:27.279 And and I think what you're seeing

right now is it's different by tenant. 00:20:27.440 --> 00:20:33.359 Um you may have some smaller neo clouds or even mid-sized neo clouds where they've got large equity funding. 00:20:33.440 --> 00:20:37.200 Maybe they were VC backed and they raised a lot of money in the private markets. 00:20:37.440 --> 00:20:41.920 Most of their money they're trying to deploy towards chips and GPU purchases. 00:20:42.079 --> 00:20:49.119 And so they're balancing how much they need to pay on rents and leases versus deploying more equity down on the GPUs. 00:20:49.279 --> 00:20:57.359 Uh, you have more hyperscalers and maybe more IG credit who have a lot more cash in the balance sheet, more liquidity, access to more lines. 00:20:57.519 --> 00:21:05.039 Those are the groups that are willing to kind of work with you and often prepay more to secure that right to access the power. 00:21:05.119 --> 00:21:07.119 And so there's an interesting dynamic there. 00:21:07.279 --> 00:21:23.519 The third thing I'd mentioned, and you're starting to see this uh across the industry, is that there's a number of creative joint ventures and structures that can be evolved, sometimes with the tenant, sometimes with a third-party investor, sometimes with like an infrastructure fund, either on the credit or equity side. 00:21:23.759 --> 00:21:31.599 And those are conversations that myself and my capital markets team are actively engaged with because there's kind of the circular component, right? 00:21:31.680 --> 00:21:41.680 You need a tenant, you need a tenant that is financeable, so you can deal with the capital stack, and then you need ourselves who's going to be building out and being able to develop the data center. 00:21:41.839 --> 00:21:44.640 And you've got to get all three of these pieces to line up. 00:21:45.125 --> 00:21:54.005 Hey, in terms of kind of juggling different pieces here, in terms of sequencing, you guys obviously have BitDeer uh co mining or hosting at some of these facilities. 00:21:54.164 --> 00:22:02.164 Do you have any idea in terms of which site could be potentially first online or what order you'll bring these on as you remove the hosting? 00:22:02.720 --> 00:22:08.799 Yeah, I think one thing that we've designed the portfolio is to preserve the flexibility and optionality. 00:22:08.960 --> 00:22:16.960 What we've seen recently is many of the potential tenants or off-takers that we're speaking to are looking at this on a potential portfolio basis. 00:22:17.119 --> 00:22:20.559 And they kind of get this distributed compute across a couple of sites. 00:22:20.720 --> 00:22:27.039 And as we look to scale and grow with and develop our pipeline, I can see that becoming a play. 00:22:27.200 --> 00:22:33.599 It's not that we are kind of married to that idea, and we would look at potentially a single tenant or multi-tenant as a single site. 00:22:33.920 --> 00:22:41.680 But right now, at least in terms of the design and phase, we've been going through all the pre-design work on all sites at about the same speed and fashion. 00:22:41.839 --> 00:22:45.839 So we would have the ability to kind of deliver the 50 megawatts we have online. 00:22:46.079 --> 00:23:07.920 My guess is it will come in kind of stages, maybe over across a period of months, where five or 10 megawatts comes online in month one, then another 10 megawatts in month two, and it will likely be specific to the actual design build that we go with in terms of the megawatts and critical IT that each pod or each module takes is likely what will get turned on in a sequencing fashion. 00:23:08.079 --> 00:23:20.000 But we have not committed to saying that you know this specific site in this town in Kentucky will be our first site because most of the conversations we've been having have been more on a portfolio basis than on a single site basis. 00:23:20.640 --> 00:23:27.440 One interesting point, I mean, obviously we talked about BitDeer um being, you know, obviously a tenant at your site. 00:23:27.519 --> 00:23:32.079 They're obviously trying to grow out um their um AI strategy as well. 00:23:32.319 --> 00:23:47.039 Is there any sort of potential in terms of you know uh doing maybe some joint venture with them on some of your sites as well as that turns to AR, or is it really strictly a hosting agreement and you expect to deal with other other counterparties? 00:23:47.359 --> 00:23:50.160 I would speak broader than just BitDeer specifically. 00:23:50.319 --> 00:23:59.200 We're having many conversations with many parties, both in the local industry of offering co-location AIHPC and beyond. 00:23:59.359 --> 00:24:06.960 I I think what's interesting, and if you go back to kind of the Bitcoin mining days, there was a lot of partnerships, there was a lot of kind of cross-working together. 00:24:07.200 --> 00:24:13.279 Oftentimes a competitor would be a tenant if they they had extra mining machines and they needed to be a resource. 00:24:13.359 --> 00:24:18.400 And so there was always a lot of collaboration, and and I think that spirit has kind of moved moved forward. 00:24:18.559 --> 00:24:28.000 Maybe it's added some different layers to it, but we're we've been having a lot of conversations that that potentially could broaden from a partnership standpoint or joint venture standpoint. 00:24:28.480 --> 00:24:42.720 And in in terms of that portfolio in Tennessee, Kentucky, that TVA region, uh, was there any change in policy post-midterm in terms of who was voted in in those states and what kind of relationships do you have with those governors? 00:24:43.039 --> 00:24:48.960 Yeah, I think um, you know, at the you got federal level, state level, and then very local level. 00:24:49.200 --> 00:24:52.480 Um in the early days post-election, we have not seen any change. 00:24:52.559 --> 00:24:54.960 And if anything, we've seen increasing willingness. 00:24:55.119 --> 00:24:58.960 I think people were kind of waiting for that day to pass. 00:24:59.039 -->

00:25:01.599 And there was a lot of rhetoric and commentary going into it. 00:25:01.680 --> 00:25:11.119 And I think, you know, people as they're running their elections and their campaigns across the country will be fairly outspoken and try and rally a base going into the election. 00:25:11.279 --> 00:25:18.000 And then I think, you know, the next day people wake up and they say, all right, it's time to roll up our sleeves and figure out where we can get some middle ground. 00:25:18.160 --> 00:25:22.480 I do think that a lot of a lot of um data centers will get built. 00:25:22.559 --> 00:25:24.640 I do think that there will be an opening. 00:25:24.880 --> 00:25:28.640 I do think that there's gonna be some more structure around them and some more rules. 00:25:28.720 --> 00:25:33.359 And and to be fair, I think many that will benefit and should benefit these local communities. 00:25:33.519 --> 00:25:43.839 And so I think you're gonna see that come about in in the coming months and in the next kind of two-year cycle, where there will be uh a bit of the meeting of the minds and a lot of discussions that take place for the positive. 00:25:44.640 --> 00:25:45.039 Yeah. 00:25:45.680 --> 00:26:07.599 One thing we've noticed um as most of these prior Bitcoin mining companies have transitioned their power towards HPC AI is the fact that bringing on uh significant experience uh to help them because it's not just trying to build Bitcoin mining sources, these tier three, tier four day centers are significantly different if that's the route that you decide to go down. 00:26:07.759 --> 00:26:22.319 What's uh Dark Course been doing in in terms of preparing yourself for that uh move from mining to um uh to HPC uh sort of like co-location and getting the right expertise to support the company going through that transition? 00:26:22.640 --> 00:26:23.920 I think it's an important question. 00:26:24.000 --> 00:26:37.839 I I think the first thing we did is we were being honest with ourselves and we we recognized that to build the tier three data center or anything above that level is a very different build type than the Bitcoin mining facilities that we had and other industries as well. 00:26:38.000 --> 00:26:40.559 And so the first thing we did was we tapped into our networks. 00:26:40.640 --> 00:26:43.039 We said, Who around us knows this and is experts? 00:26:43.200 --> 00:26:54.160 And we brought on a group of professionals that are data center veterans from everything from the build and design to the end state, which is the operations after the centers are built. 00:26:54.240 --> 00:26:55.759 So we have that now on our team. 00:26:56.000 --> 00:27:02.559 The second thing is we went to the broader market and said, who which professional services and which companies are really good at this? 00:27:02.720 --> 00:27:12.799 So we brought on a very large engineering firm and specifically a group within the engineering firm that can design a platform of smaller modular

data centers. 00:27:12.880 --> 00:27:16.799 So they are very focused on making this scalable and repeatable. 00:27:16.960 --> 00:27:34.480 So in our mind, we're not just building for our first data center, our second, but we're already planning toward the future, and everything from pre-budgeting and design and permitting, all the steps that we're put in place on our existing sites today, are things that we believe will be scalable and repeatable as we add more sites into our pipeline. 00:27:34.559 --> 00:27:42.400 Uh, we've made inroads for general contractors, we've made inroads in terms of partnerships on supply chain and procurement and project management. 00:27:42.480 --> 00:27:51.839 And so these are all the different resources that we've been recruiting and building in our team over the last six months, kind of in anticipation of this transformation. 00:27:52.480 --> 00:27:55.680 Hey, last one for me, Joel, just kind of a timely one. 00:27:55.839 --> 00:28:01.039 Over the weekend, obviously, some allegations broke over NVIDIA CEO. 00:28:01.119 --> 00:28:03.599 Uh Anthony and I have pointed out many times. 00:28:03.839 --> 00:28:08.319 Nvidia's uh taken part or owns many of the companies in the ecosystem. 00:28:08.400 --> 00:28:14.640 Do you see any kind of contagion risk there, or do you think this is more so a kind of a personal issue outside of the company? 00:28:15.359 --> 00:28:21.119 I I think it's probably too early to speak broadly in terms of kind of the corporate and direction. 00:28:21.279 --> 00:28:30.960 Um, what I would say is that obviously NVIDIA is the leader, and to your point, has taken a pretty uh big stake and backing in a lot of downstream companies. 00:28:31.200 --> 00:28:41.200 My understanding right now is that those contracts are in force and the support is there, and there's a broader kind of corporate governance structure that they have within their company that they'll let play through. 00:28:41.440 --> 00:28:49.200 The other thing I would mention is you know, we we've been open and having conversations with a number of chip manufacturers and chip designers. 00:28:49.359 --> 00:28:53.759 Um, and we've been a bit in terms of preserving those options, having those conversations. 00:28:53.920 --> 00:28:58.799 And so, you know, where I sit right now, you know, we don't we don't envision necessarily contagion. 00:28:59.039 --> 00:29:05.039 Um, but again, from a from both the personal side and their corporate side, you got to let that process kind of play through. 00:29:05.599 --> 00:29:06.079 Yeah. 00:29:06.559 --> 00:29:13.519 One for me, um uh and it just came to me in terms of my time in in looking at both strategies. 00:29:13.759 --> 00:29:23.279 Um, in the Bitcoin mining strategy, Asset Lite was was covered by one of the major miners at the start there, but didn't really um you know work in terms of that control. 00:29:23.839 --> 00:29:29.680 Yet we're seeing that exact strategy um in the HPC sector. 00:29:30.079 --> 00:29:38.400 Um, you know, you've been through a number of sort of like MA activities in your sort of career, you've already highlighted three of them in your introduction there. 00:29:38.559 --> 00:29:51.920 What do you see in the space in terms of we've got a lot of companies who've got a lot of power, some are small, some are a bit bigger, and we've got some behemoth um hyperscalers out there and some very large neo clouds uh coming into the space? 00:29:52.079 --> 00:30:07.039 Um, it's a question I used to ask for the Bitcoin mining space, but in terms of HPC, do you see some sort of MA activity over the next few years to try and sort of pull some of this together, or do you see actually there's opportunities for everyone to carry as they are? 00:30:07.359 --> 00:30:12.720 Yeah, no, I think it's a good question, and I think you've got to go back um, let's say, to 2020 or 2021. 00:30:12.960 --> 00:30:22.880 It's interesting when you spoke to uh bankers, deal makers, uh different partners in that industry, I think people were anticipating consolidation sooner than it happened. 00:30:23.039 --> 00:30:29.680 And it probably created uh a market disruption, which was kind of the crypto winter of 2022. 00:30:29.839 --> 00:30:34.960 And then out of that, you had distress companies, you had some bankruptcies, you had some assets changing hands. 00:30:35.119 --> 00:30:45.279 But I remember talking even in early in late 2021 with a number of people, um, both within companies and let's say from the investment banking side, and thinking consolidation was coming very quickly. 00:30:45.440 --> 00:30:52.559 You know, as I view the world right now, um, we at Dark Horse have a first philosophy of own the power and land. 00:30:53.039 --> 00:30:57.599 And that that is the core asset that we want to continue to develop. 00:30:57.759 --> 00:31:00.960 And we'll do that organically and likely inorganically. 00:31:01.039 --> 00:31:06.160 Um, organically, it's happened naturally with conversations with communities, with local co-op utilities. 00:31:06.240 --> 00:31:11.599 There's opportunities being brought to us because we've been a good community partner in these local markets. 00:31:11.759 --> 00:31:18.319 And then we'll always be open to inorganic opportunities that are creative to our shareholders, and we'll look at that. 00:31:18.480 --> 00:31:23.039 I so I think you know, a lot to sum that up, I would anticipate consolidation. 00:31:23.200 --> 00:31:26.960 I think it's too early to tell people when and make a prediction on that. 00:31:27.039 --> 00:31:34.000 And I think if you look back at prior cycles, um people were probably right, but maybe got their timing slightly off. 00:31:34.079 --> 00:31:36.960 And I think that's what's going to be an interesting dynamic that plays out. 00:31:37.279 --> 00:31:41.920 Well, you you were probably involved in the biggest of the MA activities during that cycle there. 00:31:42.079 --> 00:31:42.960 There weren't too many. 00:31:43.039 --> 00:31:53.279 And I I remember at conferences where I was speaking or moderating panels asking the panel of CEOs from some of these mining companies, and they were saying, Yeah, there's been a lot of AMA, there'll be a lot of MA. 00:31:53.359 --> 00:31:55.920 And there wasn't, to be honest with you, not significantly amount. 00:31:56.160 --> 00:32:01.519 Some of the smaller companies have changed names and things like that, but in terms of the larger ones, was never ever anything. 00:32:01.599 --> 00:32:11.200 And we saw obviously uh Riot um try to do the same with um Keel, and that didn't sort of like really pan out uh from a shareholder standpoint, never mind a company standpoint. 00:32:11.279 --> 00:32:17.440 But um, no, that that's uh that's a that's a that's a that's a good response there, and uh that's that's my question's uh complete. 00:32:17.759 --> 00:32:23.359 I was gonna say, Joel, if you run dark horse as efficiently as you run an interview, things are looking pretty good. 00:32:23.599 --> 00:32:25.359 Um we're through our question list. 00:32:25.519 --> 00:32:26.640 You'd made great time here. 00:32:26.720 --> 00:32:33.759 We'll give you an opportunity to close out, but great conversation and very eye-opening in terms of what you and the company are all about. 00:32:34.160 --> 00:32:34.640 Thank you guys. 00:32:34.799 --> 00:32:36.079 No, I appreciated the time today. 00:32:36.160 --> 00:32:43.759 I I would just sum it up that uh the third quarter and probably the next few quarters, we're actively going through kind of this transformation. 00:32:43.920 --> 00:32:54.880 Um, all of our mind share and our wallet share is being invested toward these growth capex opportunities to fuel kind of getting the sites ready for the AIHPC transformation. 00:32:55.119 --> 00:33:03.440 We made a lot of headway on the pre-development work, pre-construction work, local level engineering plans, site studies, permit packages. 00:33:03.599 --> 00:33:12.799 And you know, I would anticipate you seeing further updates on that and potentially moving towards the more engaged tenant discussions in the months to come. 00:33:12.960 --> 00:33:16.559 So I appreciate the time today and uh looking forward to chatting you all again. 00:33:16.799 --> 00:33:17.200 Awesome. 00:33:17.279 --> 00:33:18.880 Yeah, we look forward to those updates. 00:33:18.960 --> 00:33:20.319 You know where to find us, Joel. 00:33:20.400 --> 00:33:26.240 Guys, if you have any additional questions for the team at Dark Horse Technologies, leave them in the comment section below. 00:33:26.400 --> 00:33:27.119 Thanks for the time. 00:33:27.279 --> 00:33:29.119 See you back here in a few hours.