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00:00:04.639Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis.
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00:00:10.720A big episode in store for you today as Governor Abbott doubles down on his data center pods in Texas.
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00:00:19.039We're gonna be breaking down this news and going into some analysis in terms of how it impacts the AI infrastructure players we cover on a regular basis.
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00:00:22.399Before we do, take a second, smash a like button, guys.
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00:00:23.920Big help to myself and the channel.
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00:00:25.519Anthony absolutely loves it.
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00:00:28.879If you're not already subscribed, McNally Money, feel free to join.
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00:00:35.359And let us know in the comment section below what you think of Governor Abbott's move and how you think this could impact your portfolio.
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00:00:38.479With that being said, let's get into today's video.
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00:00:48.880Okay, guys, away we go.
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00:01:02.000Tuesday afternoon, another big episode in store for you, specifically covering the new updates out from Governor Abbott in the state of Texas, plus some key headlines and updates in the AI infrastructure space.
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00:01:05.680Now, in typical fashion, Anthony, Bitcoin will start us off today.
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00:01:08.48086,300 on screen.
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00:01:11.040You're saying it's actually creeping up in real time.
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00:01:15.280This is great to see us now holding this$86,000 level.
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00:01:21.359Yeah, real time$86,600 as we're speaking now, and uh you can see the five-day chart there.
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00:01:29.439It's over 13% increase last five days, which is uh a bit higher than probably the average um uh volatility of Bitcoin.
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00:01:31.200We normally say two to three percent.
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00:01:36.079We normally say the stocks probably five to eight percent volatility.
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00:01:47.840Um, but uh bitcoin having a having a nice sort of mini rally in the last five days, and uh a lot of speculators out there believe that sort of we've we've had the bottom in there when it was 58,000, 60,000.
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00:01:50.799We highlighted that as potential bottom.
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00:01:58.159Um, but you know, be ever cautious because Bitcoin can do exactly opposite what you expect it to do anytime, any day.
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00:01:59.680Yeah, it certainly can.
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00:02:03.840And on the Bitcoin front, you and I are holding our Satoshis long term.
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00:02:09.680We're not worried about swing trading that, but nice to see Bitcoin making some moves in the right direction.
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00:02:13.520Speaking of which, we move over to the AI infrastructure players.
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00:02:16.400Yet again, a pretty green day out there, Anthony.
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00:02:20.719Looking strong with some Galaxy, Mara, hot, Riot on top.
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00:02:24.479We've also got Move or Corvex that we're gonna cover in today's program.
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00:02:25.840Should be a good one.
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00:02:31.520Yeah, it looks like the um the HPC companies are having uh the better of the days there.
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00:02:37.759You've you've highlighted Galaxy uh up over 4.85% there.
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00:02:47.439Um, and again, you know, a good day for Mara, Hutt, Riot, Iron, Hive, Keel, Wi-Fi, cause, move, uh, which is the ticker symbol for Corvex.
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00:02:52.639There, uh, you know, all the sort of HPC storylines are getting positivity.
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00:03:00.560Uh, D, I mean, it's not too about the bottom, DMG down three percent, uh, ABTC, you know, marginally down, and BitDeer marginally down.
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00:03:05.919They're obviously uh still reliant a lot of uh on their Bitcoin mining revenues coming through.
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00:03:28.159I mean, we highlighted BitDeer uh this week already with their uh weekly update and you know on track for maybe another 12 to 1300 bitcoin in the month there, so they're gonna benefit uh really from the Bitcoin price as we see it rise, and uh also the fact that uh difficulty has been dropping this year, so it's a little bit of a uh a two-edged sword for them, and they've been doing well.
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00:03:39.680And the third uh part of that is the fact that their machines, um you know, the efficiency machines means that they're not having to use as much power to mine a bitcoin, so it's pretty much a win-win-win for uh for BitDear.
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00:03:45.919So don't be too uh distraught there, it's only fractionally down there, still over$13 um a share.
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00:03:54.560I like to look at the 52-week range there just to see um are we still advancing, and we can see that Hut and Riot uh still advancing.
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00:04:03.919Um, you know, it looks like they're now over their halfway uh positions in terms of uh their 52-week uh towards their 52-week high.
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00:04:05.280So that's good to see.
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00:04:10.960Um, you know, there's still a lot of potential, and a lot of these other stocks there with equally good stories behind them, too.
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00:04:24.639Uh they're really at the bottom of their 52-week ranges, so there's still some value out there, and I've said before, you know, the the the portfolio is is is up really well the last sort of uh last few days, the last week, the last month.
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00:04:33.920But if you go back to the three-month period, and I think if you've got similar stocks to this table here, you're going to be down probably seven-eight percent on a three-month period at the moment.
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00:04:48.160If you've got similar stocks, what we've got here, because the market was really rallying in June, and then in very short space of time, decided to about turn, and we're now sort of playing that catch up to get back to where we were in June, but we're still a little bit away from there.
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00:04:56.160I looked this morning, I think it's between about seven and a half percent away from my June position, um, hoping to get to that point.
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00:05:02.800And bear in mind, during that period where the stocks were falling, um, I was able to go in there and use some of the cash that I had on the sidelines.
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00:05:04.000I had a lot of cash in June.
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00:05:10.399Having sold a lot of shares going up to those highs, I was able to buy some back uh at lower prices.
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00:05:16.800So, you know, having uh effectively more shares, if we get to the same prices that they're in June, I'm gonna be significantly higher.
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00:05:22.720But even now, having more shares, I'm still a gap of about seven and a half percent, just look literally before the podcast.
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00:05:30.560But that's been closing, it was closer to 30% uh a couple of weeks ago, so that's how things can change, and things can change really differently.
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00:05:33.040But um, do your due diligence in this area.
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00:05:34.560This is not for the faint-hearted.
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00:05:38.240Uh, we've talked about volatility, we've talked about price rises there.
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00:05:40.879There is some good value out there if you know where to look.
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00:05:46.720We're here to give you some sort of like uh starting point for that, but there's a lot of information available out there.
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00:05:48.240The company's put a lot of information out.
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00:05:58.879There's a lot of people on social media covering these stocks, but uh as I say, uh nice green day today, and let's hope it continues for the rest of the week and get us closer back to those June numbers.
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00:06:01.120Yeah, now a few things to unpack there.
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00:06:04.480I mentioned we don't swing trade our Bitcoin or Satoshis.
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00:06:14.639We have taken the opportunity to swing trade or load up on some of these lows in the AI infrastructure space, and as you said, Anthony, we're now pretty much just sitting and waiting.
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00:06:20.399We've been fairly slow on the power play in terms of our uh trade videos because we haven't been making trades.
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00:06:25.759We're sitting, we're waiting for these companies to get fairly valued and then repeat the process.
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00:06:30.480Now, moving over to the heat map, you talked about the 52-week range there.
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00:06:43.120Looking at this chart, that's probably the worst performing column in terms of the most reds, but you can see the shorter durations to your point, Anthony, the five-day, the monthly looking extremely good in the space.
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00:06:52.959Yeah, we're seeing um we're seeing very positive on the five-day and the one month change there, the year to date and the and the year change um also in positive territory.
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00:07:03.120But as I say, if we had a three-month um uh change in here, that would probably be a you know closer to maybe between seven and ten percent um as an average across the stocks here.
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00:07:05.199Uh, because most of them did exactly the same.
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00:07:17.680You can see from that from that 52-week range there, a lot of them sort of in that same ballpark where they where they've been, and um so it tells you that stocks have been have actually been performing very similar to each other, very much correlated.
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00:07:23.680So um, but I like the fact that you know we're still seeing a lot of green on here, and there's probably a lot more companies.
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00:07:31.839I think we counted seven companies agreeing across all five time periods there, which was um a lot more than we were quoting last week.
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00:07:33.279Yeah, it certainly was.
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00:07:36.319Now, moving on to the main event, uh, this is a big one.
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00:07:39.040So we're gonna spend some time on Texas today.
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00:07:49.279Governor Abbott, this is not the first time we've reported on his actions, has now come out basically doubling down on the data center permitting and pause or halt.
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00:07:51.920So this is outside of the ERCOT workflow.
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00:07:54.959I'll let you walk through yesterday's announcement, Anthony.
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00:08:00.720Then we can understand how these work together and what it means for the companies operating in Texas.
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00:08:14.079Yeah, yeah, I mean, the key points to that announcement yesterday is really Governor Governor Greg Abbott has ordered a pause on environmental permits for new data centers until an audit of the existing wait list is conducted.
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00:08:21.600Now, the audits were originally ordered by Abbott in August when he also imposed a moratorium on new data center grid approvals.
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00:08:28.480And data centers have been a flashpoint during 2026 midterm elections, including Abbott's bid for re-election.
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00:08:50.399We've heard a lot of um, you know, uh not just uh apolitical but across both uh parties where you know maybe some of the voters have been uh you know uh voicing their opinions against data centres, and you can see that uh Governor Abbott wants to make sure that all the ducks are in a row in uh Texas before any further approvals are made there.
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00:08:55.200And we'll come on to some of the key points as to why uh this has come out.
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00:08:59.919Yeah, now the first thing I want to do here is just define a few of these uh acronyms.
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00:09:02.720So we've talked about ERCOT, the batch zero process.
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00:09:05.919That was that moratorium you just mentioned on August 3rd.
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00:09:10.399There's also the PUCT, which is the Public Utility Commission of Texas.
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00:09:17.600And as you'll talk about next, Anthony, this TCEQ, which is really what this announcement is based on.
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00:09:20.799That's the Texas Commission of Environmental Quality.
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00:09:27.600So now we can understand maybe how this new regulation impacts the data centers looking to come online.
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00:09:50.639Yeah, and the key word in there is environmental uh quality, um, you know, and so on till ERCOT and the Texas Water Development Board, the TWDB, complete their audits, closing the behind the meter loophole that's um let self-generating projects bypass earlier ERCOT only paused.
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00:10:12.240Now, this has come about, this is now the fourth escalation since just since June, and it's starting uh with a cost shifting order, and then the August 3rd batch zero, then the um Texas uh water development board penalties for non-reporting, and now a full Texas Commission and environmental quality uh permit freeze.
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00:10:19.120And the reason this came about is only 28% of surveys were completed and responded.
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00:10:30.879That's a very low compliance that's really triggered the governor's move here to penalize non-reporting developers and to pull the TWDB directly into the audit process.
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00:10:35.039Yeah, so this one, keep in mind, midterm elections coming up.
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00:10:37.919Governor Abbott was all for data centers.
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00:10:42.960Back in 25, he said he wanted to be the leading data center state in the country.
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00:10:44.480Now we've seen that shift.
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00:10:47.600So obviously, there's a lot of people opposed to data centers.
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00:10:50.960We've covered this NIMBYism movement, not in my backyard.
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00:10:57.440But what we're hearing from the CEOs is it really comes down to either misunderstood information or a lack of information.
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00:11:08.639And that's why these companies are so active, getting involved in the community, understanding what these data centers mean, the construction, the volume, the water, the electricity, so on and so forth.
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00:11:17.440So now we've got the ERCOT pause going on, and we've got this TCEQ environmental quality pause across the board.
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00:11:22.399So behind the meter, grid connected, doesn't matter if you're waiting on your environmental permit.
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00:11:27.440You're now stuck until December when they complete the batch zero audits.
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00:11:29.919How do these two work together, Anthony?
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00:11:33.519Can you explain this in a little bit more reasonable language here?
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00:11:35.120Yeah, so you're quite right there.
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00:11:37.039There's two separate tracks now being paused.
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00:11:39.840The grid connection, which has been paused since August the 3rd.
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00:11:49.279There, that applies only to projects wanting to connect to the ERCOT grid, requires the completion of a 250 question uh community impact survey.
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00:11:52.080That's got to be completed by October the 12th.
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00:12:00.879Also requires a separate verification step, which is proving the project is real, lease deed permits, etc., for projects in the batch zero group.
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00:12:06.320The findings have been compiled into an ERCOT audit report, which will be due in December.
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00:12:15.519And if you miss the survey deadline, uh you're reported to the PUCT and the Governor's Office, and penalties will be decided on a case-by-case basis.
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00:12:16.960That's for grid connection.
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00:12:22.720In terms of environmental uh permits, they've been paused since uh yesterday.
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00:12:29.600Now, this applies to all data centres, regardless of whether they connect to the grid or generate their own power behind the meter.
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00:12:49.679Uh, the TCQ will issue zero permits, air quality, water discharge, construction, etc., until Urcot and uh the water development board audits are complete, and this will close that loophole that lets off the grid self-generating projects avoid the first pause.
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00:12:55.679Now the TCQ must report its compliance statements to the governor's office by October the 19th.
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00:13:06.000And just to highlight what this really means in practice, if for on-grid projects, if you're blocked twice over, you can't connect and you can't get environmental permits.
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00:13:12.240If you're behind the meter or off-grid projects, previously you only needed to worry about permits from the other agencies.
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00:13:20.080Now you also can't get TCQ permits, so they're effectively stuck to even without touching the ERCOT grid at all.
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00:13:32.159And nothing will move forward, no new construction, new interconnections, new environmental signos until ERCOT and the TWDB finish their audits and hand over their findings.
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00:13:34.559Yeah, so a lot to digest there, Anthony.
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00:13:38.720So in my mind, immediately, and I wanted to get your thoughts, a number of things come up.
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00:13:42.480Projects that already have power, we're going to talk about Riot next.
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00:13:47.200Those probably increasing in value as now everything's delayed till December.
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00:13:48.960The other one is this behind the meter.
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00:14:00.080We've seen a number of companies think about this strategy or start to look at wind, natural gas, pipelines, whatever the case is, essentially trying to sidestep the ERCOT batch zero process.
00:14:00.159 -->
00:14:08.000Abbott's saying now, no, guys, you're not doing that unless you have all your environmental permits, regardless of if you're behind the meter or not.
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00:14:11.600That's going to be on hold till the batch zero audit is done.
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00:14:14.320Now, Anthony, what's your interpretation of this?
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00:14:16.000Is this good for the market?
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00:14:18.720We've heard CEOs support Abbott before.
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00:14:21.200Do you think the value of existing sites goes up?
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00:14:23.279Do you think other markets are more lucrative?
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00:14:24.639What's your take?
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00:14:26.799Um, I think a couple of points there.
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00:14:39.919I think this certainly will highlight those that are the uh, you know, the the real actors in this space who've got you know real sites, real real power, real permitting um procedures that they followed.
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00:14:56.960And fortunately, I would say that the majority, if not all the companies that we talk about on a day-to-day basis, that have facilities in ERCOC were very, very much supportive of the first uh study that uh the governor requested on the batch zero, and we've seen the results of those that have come out there.
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00:15:05.279A lot of the companies that we talk about in the day-to-day basis, and we'll come on to right, and that they have power already, so this is not really going to um affect them.
00:15:05.440 -->
00:15:14.399But we know that um in terms of you know power and water and environmental, many of them have talked about the process of going through permitting.
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00:15:32.480I mean, you know, Ben Gagnon's talked about it excessively in terms of what Keel are doing in PJM and in Washington State, um, and you can see by going through that process there, they're getting the ticks in the boxes, and the likelihood is that they'll get their three contracts signed in the next sort of four or five months.
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00:15:37.120Um, certainly, you know, maybe some by the end of the year, maybe some in early January.
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00:16:14.639Um, in terms of what you said there about the value, I would suggest that those um those companies that have power available now that haven't been hasn't been contracted but is becoming available in 2027 are certainly potentially going to get a premium for that power because the demand is going to outstrip the supply significantly as more and more of these companies are going to be found out, and it's not you know, there's that they've not met all the conditions, uh, that they've now got through to two processes to follow in terms of permitting, and uh, you know, that the likes of Riot with the Coursi Carner site there could be sitting really well.
00:16:14.720 -->
00:16:23.919And remember what um uh what uh Jason said to us in November last year when we visited the site, you know, he could have signed a deal um in November last year.
00:16:24.000 -->
00:16:28.480He already had a uh you know, a company's knocking at the door, ready to sign long contracts.
00:16:28.799 -->
00:16:36.399He felt that uh the company warranted um you know a better return than that, and he's prepared to wait out.
00:16:36.480 -->
00:16:47.840And you can see what's happening now in terms of that recent deal with Anthropic at the uh Rockdale facility there, that's close to$2.4 million per megawatt.
00:16:47.919 -->
00:17:15.920I expect um CorsiCarns to achieve at least that, and potentially what you're saying now with regards to uh the issues now in in Texas and the requirements for uh large sites that have power available, uh, that could command a real premium and be interesting to see if if some of the companies are sitting pretty in their negotiations as we move forward because you know uh the hyperscalers and neo clouds they need this power, they're going out there buying power.
00:17:16.000 -->
00:17:22.400We talked about yesterday, they're going out now looking at smaller locations because all the big locations seem to be tied up.
00:17:22.559 -->
00:17:25.519They're now looking at maybe 30-50 megawatt sites.
00:17:25.759 -->
00:17:41.599Corsi Carna is a 756 megawatt site of compute power, it's a gigawatt site, but with a very, very good PUE compared to uh other operators in Texas with a great design that they've they've put together.
00:17:41.680 -->
00:17:46.799Uh, they've managed to eke out 756 megawatts of potential compute power.
00:17:46.880 -->
00:18:00.319That's going to be uh a significant uh requirement for any one of the hyperscalers or neo clouds, and and when Jace announces that on there, all eyes will be watching and focusing on that deal because this is the one that people have been waiting for.
00:18:00.400 -->
00:18:12.319This is a big, big site that is literally um 800 megawatts of power now with a further 200 megawatts to add, all the land in place, the waters in place, the fibers in place.
00:18:12.480 -->
00:18:15.519We've been to the site twice in the last couple of years.
00:18:15.599 -->
00:18:19.599Um, it ticks every box, it's one of our best sites that we've been to there.
00:18:19.680 -->
00:18:21.359The team there are phenomenal.
00:18:21.519 -->
00:18:23.119Um, it's all looking good for right.
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00:18:32.720Yeah, and just on the water point, Anthony, we showed this last week, but saying a modern data center actually uses less water than a standard 18-hole golf course.
00:18:32.799 -->
00:18:40.240So, again, in terms of awareness and education, I don't think the impact is maybe as bad or as drastic as some people feel.
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00:18:49.039To your point about patience, we just heard from Kent Draper at the all-in conference talking about the rates per megawatt or value per megawatt.
00:18:49.119 -->
00:18:52.799And they were saying they expect that bottleneck to continue to constrict.
00:18:52.880 -->
00:18:58.480And that's why we're seeing on CSP and colo the rates going absolutely berserk right now.
00:18:58.640 -->
00:19:01.839So in Texas, if you've already got power, great.
00:19:01.920 -->
00:19:03.599We think the value is going up.
00:19:03.759 -->
00:19:09.440If you've got more power coming online post December, again, should be no problem there.
00:19:09.519 -->
00:19:13.680It's just for people trying to set up this data center in the next couple months here.
00:19:13.839 -->
00:19:17.279Again, most of our companies exempt from that category.
00:19:17.519 -->
00:19:21.920Now, another good example here, Anthony, we talk about bringing your own generation.
00:19:22.079 -->
00:19:26.880We talk about the value of power in Texas compared to other parts of the United States.
00:19:27.200 -->
00:19:36.880Mara, as you can see, they've not only got a strong presence in central Texas, but they've got uh operations all over the United States and globally.
00:19:36.960 -->
00:19:43.680So, my question to you here is how do you think this impacts the value of those sites outside of Texas?
00:19:43.920 -->
00:19:49.920Um, again, I would imagine you know, most areas will have to go through similar um processing, permitting.
00:19:50.000 -->
00:20:01.599We've seen that uh from what we've heard from Ben in PGM actually said it was more rigorous in uh in his area in Pennsylvania than it was in Texas.
00:20:01.680 -->
00:20:19.119Um so I would imagine Area by Edra they will have you know certainly um an element of the same types of permits required, and then it's really dependent then on how you know that the the the state governors are looking at this because we're talking now, it's very it's very political at the moment, you know.
00:20:19.200 -->
00:20:34.160Uh governors coming up for re-election and uh will have to listen to how their uh voters are potent potentially feeling about this, but again, we talk about these companies on a daily basis, we talk about the positivity what these companies bring to areas.
00:20:34.319 -->
00:20:37.440Mara are no and no a stranger to this.
00:20:37.599 -->
00:20:45.920You know, we've covered the fact that you know they in in Scandinavia they were able to provide power to heat 11,000 homes over there.
00:20:46.319 -->
00:20:54.400These companies do so much for the local communities, they're not just going in there trying to just you know uh think about the bottom line.
00:20:54.559 -->
00:20:57.359Um, they want to uh to to do well in the local community.
00:20:57.519 -->
00:21:00.319Many of the local communities work at their facilities.
00:21:00.480 -->
00:21:01.359We've been fortunate.
00:21:01.440 -->
00:21:16.000We've been to the Granbury uh site there in Texas, there's a 300 megawatt uh gross capacity site there that could be delivering 200 megawatts of compute power in the not too distant future because that site there currently is a Bitcoin mining site.
00:21:16.079 -->
00:21:26.960But believe you me, if they brought uh the lorries in there, they could remove the Bitcoin mining in the space of maybe a couple of weeks because they're not sort of like uh big facilities there.
00:21:27.039 -->
00:21:43.680They could probably hoist them up and and rem and remove them and transport them to other locations and therefore leave the site there uh in a in a state ready for uh you know for the for the groundworks to be completed and um um you know made ready for tier three buildings to be built on there.
00:21:43.759 -->
00:21:52.799So that you know there's not it's not a case of like um what we're seeing at Washington State in terms of the Moses Lake facility where they had a Bitcoin mining site.
00:21:53.039 -->
00:21:53.920This is uh slightly different.
00:21:54.079 -->
00:21:59.759They have modular facilities that were easily able to be uh uh removed and and relocated.
00:22:00.160 -->
00:22:01.920Uh in a very, very short space of time.
00:22:02.000 -->
00:22:05.200So obviously, you know, in hindsight, you could say thinking ahead there.
00:22:05.279 -->
00:22:07.599But I think this hit quite pretty.
00:22:08.079 -->
00:22:15.279The other thing is that you know, Mara not just been looking at buying uh uh sites, they've also been looking at buying power as well, Bryce.
00:22:15.519 -->
00:22:18.319Yeah, and that's where I wanted to kind of shift the conversation.
00:22:18.400 -->
00:22:27.200So you look a couple of lines down below Texas, you see Ohio, Anthony, and this is really in relation to that long ridge energy and power acquisition.
00:22:27.359 -->
00:22:34.720Now, we pulled up the press release here, expected to close in Q3, so potentially within the next week or so.
00:22:34.799 -->
00:22:38.160Uh, but this is a significant increase to their portfolio.
00:22:38.240 -->
00:22:40.160I'll let you walk through the site itself.
00:22:40.319 -->
00:22:47.119We're talking hundreds and hundreds of megawatts, and again, located in Ohio, outside of Texas.
00:22:47.440 -->
00:23:03.680Yeah, so Mara expects the acquisition of its long-ridge energy power to close in the second half of 2026, probably towards the end of this quarter, um, pending that final regulatory clearances, such as approval from the Federal Energy Regulatory Commission.
00:23:03.920 -->
00:23:14.079The purchase price for this site wasn't cheap, it was$1.52 billion the transaction value there, um, and it included some assumed uh debt within that transaction.
00:23:14.240 -->
00:23:22.160It's a 505-megawatt combined cycled gas power plant and over 1600 acres in Hannibal, Ohio.
00:23:22.319 -->
00:23:43.599Now the management anticipates receiving the remaining regulatory replies before uh year end, so we're getting closer and closer to this deal being completed, and certainly having that size of power there and that sort of um uh space to deliver HPC is going to put them in a very very uh strong position.
00:23:43.839 -->
00:24:02.960Now, in terms of the campus itself, um, it's a top-tier campus with existing HPC interest, and the power infrastructure is uh will be absolutely visible within the e-bit DAR and significant expanding uh Mara's global uh portfolio.
00:24:03.119 -->
00:24:05.119This is another big, big acquisition there.
00:24:05.359 -->
00:24:20.319Remember, um, go back four or five years ago, Mara were really an asset-like company, they were buying the ability to buy machines to to locate in hosted facilities so they could use their capital really just to pay for Bitcoin buying machines.
00:24:20.400 -->
00:24:31.119Now their focus is on buying uh the land and the power uh to deliver this uh this new HPC strategy, and you can see they're not going about it in a small manner.
00:24:31.359 -->
00:24:32.319No, they're not now.
00:24:32.400 -->
00:24:42.640You mentioned Long Ridge 505 megawatts, they've also got Hannibal, which is an Ohio site uh Mara owns as well, 200 megawatts and some expansion opportunity there.
00:24:42.799 -->
00:24:47.440So potentially upwards of 1,105 megawatts, Anthony.
00:24:47.599 -->
00:24:56.960And what's so interesting about this region, you can see on the map, absolutely littered with data centers, some of the biggest operators in the country here.
00:24:57.039 -->
00:25:02.400I'll let you walk through some of the names, but this seems like a very hot data center market.
00:25:02.960 -->
00:25:15.680Yeah, and that 1100 megawatts of gross power there will give them at least 600 megawatts of critical IT load um all the way through to 2030 with their uh partnership with Starwood.
00:25:15.759 -->
00:25:16.960Uh, and you're quite right.
00:25:17.039 -->
00:25:20.480I mean, where they're located there, you can just bring out some of the big names there.
00:25:20.640 -->
00:25:29.440Google, AWS, Microsoft, Meta, Core Weave, you know, just to round off a few of the names in the area and NScale as well.
00:25:29.519 -->
00:25:32.000We've talked about NSscale, that's the UK company.
00:25:32.079 -->
00:25:41.440We talked about them yesterday, they're going for an IPO on the New York Stock Exchange very, very soon with a potential valuation of in excess of$30 billion.
00:25:42.000 -->
00:25:48.559Remember, we saw Iron's uh market cap today, it was$19 billion on the heat map.
00:25:48.720 -->
00:26:10.000Um, and NScale there, they've got about 55 megawatts of actual power energized at the moment, but they've got this massive contract uh following that um uh a 45 billion dollar deal with anthropic, and that's probably giving them the sort of like the credibility to get that size of of um IPO um initially there.
00:26:10.160 -->
00:26:19.599Now that tells me that a lot of the companies we talk about on a daily basis, once they start signing some of these big contracts, will see their market capitalizations be re-rated by the market.
00:26:19.759 -->
00:26:43.519Um, HPC just seems to be having that effect on all these companies, and um, it's getting uh you know a lot better because of the fact that these companies hold the power, power's the bottleneck, and if you want to deliver HPC, uh you can't go anywhere without having the power, so it can really hold up um you know the hyperscalers and neo clouds in that in that search to get large sites.
00:26:43.599 -->
00:27:00.480Uh, the mining companies know what they've got there, and some of them are holding out for that really, really strong deal going forwards, which the deals we've seen in the last few months have been exceptional, around about the 2.3, 2.4 million dollars per megawatt for co-location, and now the CSP contracts are going through the roof.
00:27:00.720 -->
00:27:11.839Go back 12 months ago when Microsoft and uh IRAN signed that initial deal for just under um 10 million dollars per megawatt uh for a CSP contract.
00:27:12.000 -->
00:27:38.720You know, on a on contracts of a year or less at the moment, IRA now looking at 40 million dollars for those type of uh contracts there only 12 months later, and we're not seeing any respite on those rates coming down, they look like they're going up, and with what you said before, Bryce, in terms of demand and supply, I think we could still go even higher because the demand for this type of industry is um is going through the absolute roof.
00:27:38.960 -->
00:27:44.720Yeah, it definitely is, and keep in mind we've got world leaders discussing AI this week in Washington as well.
00:27:44.880 -->
00:27:53.440Now, speaking of growth, expansion, and the really focus on HPC AI megawatts, we wanted to talk about Corvex.
00:27:53.599 -->
00:28:02.240So we brought up this article dated August 31st, talking about this 5x expansion in terms of their AI factory business unit.
00:28:02.319 -->
00:28:07.519So we'll talk a little bit more about Corvex in a second here, but this is exactly what we mean.
00:28:07.680 -->
00:28:13.279Companies start to make the pivot, they see the opportunity, and then they double down and build out.
00:28:13.359 -->
00:28:15.920Uh, Anthony, what can you tell us about Corvex?
00:28:16.400 -->
00:28:20.480Yeah, so uh Corvax itself uh recently IPO'd.
00:28:20.799 -->
00:28:31.759Um they actually merged with Mavano, um, whose ticker some whose they merged with Mavano whose ticker symbol was uh move M O V E.
00:28:31.920 -->
00:28:35.599Now this is in a uh a reverse buyout and this happens quite regularly.
00:28:35.680 -->
00:28:38.240We saw the similar thing happen with ABTC.
00:28:38.400 -->
00:28:51.440They um did the same with Griffin Mining, they bought uh Griffin Mining there and they were able to uh you know access the Nasdaq far quicker than they would do going through the whole normal process from start to finish.
00:28:51.680 -->
00:29:14.559Um, in terms of that growth, I mean this sort of reminds me going back uh you know nearly five years ago to when when Iron started as a Bitcoin mining company and they had like half an exah, and but they had dreams of becoming a bigger miner than that, and it didn't take them too many years to achieve take that half an X hash all the way to 50x hash.
00:29:14.880 -->
00:29:20.240And maybe uh Corvex is uh a company that can sort of like see the expansion there.
00:29:20.319 -->
00:29:29.759They're already talking about increasing uh their current um power, which is at 1.5 megawatts to approximately 8 megawatts just by the end of 2026.
00:29:29.839 -->
00:29:43.839That's a 5x increase, and then they also have this right of first refusal for an additional 12.5 megawatt expansion opportunity at the Midwest site, which will provide potential pathway to more than 20 megawatts of total critical IT.
00:29:44.000 -->
00:29:51.920And if you've plugged that number in there, that's 13 times the increase to existing capacity in a very, very short space of time.
00:29:52.079 -->
00:30:07.680And if you think about that 20 megawatts of total critical IT, um, you know, in a CSP contract, well, we've just talked about you know, iron, iron are looking at three-year deals now where it's 20 to 25 million dollars per megawatt.
00:30:08.240 -->
00:30:21.200Um, you've got 20 million megawatts there, you know, you could be looking at 500 million dollars of revenue coming through um per year on a 20 megawatt deal, a CSP contract there.
00:30:21.279 -->
00:30:40.799And remember, Jensen Wang said, you know, on the current uh GPUs that are coming out there, the latest GPUs, it it's taking now literally a year as the payback, uh, which is significant compared to what we were talking about maybe only 12 months ago, where we said a minimum of maybe two to three years payback.
00:30:40.880 -->
00:30:47.119And if you have the GPUs for five-year contract, there your profits would probably start to appear in the last two years.
00:30:47.359 -->
00:30:55.680Now it looks like you know payback happens in year one, and then you have four years of very, very profitable years uh following that.
00:30:55.759 -->
00:31:25.519And on top of the ice and on the cake, there we know that some of the older machines now are lasting longer than five years, and contracts have been signed for up to six years at the moment as well, acknowledging the fact that GPU life is is not just a five-year period anymore, it could be six, seven, or in Dan Roberts's um uh you know, thought process, maybe get to eight years, and that would give you effectively super profits for the last three years that you weren't ever going to be expecting.
00:31:25.599 -->
00:31:36.880And it'd be interesting to see how the Wall Street guys look at these extended periods as we start seeing the older machines last much, much, much longer than previously expected.
00:31:37.200 -->
00:31:40.079Yeah, a huge benefit to these CSP companies.
00:31:40.240 -->
00:31:42.319Again, case in point, Corvex.
00:31:42.640 -->
00:31:45.279You talked about that aggressive growth in the short term.
00:31:45.359 -->
00:32:00.160If we look out a little bit longer term, Anthony, 27, 28, the numbers don't lie there either over 220 megawatts online, scaling that to 325 plus if you include their 2028 expansion study as well.
00:32:00.319 -->
00:32:05.359So when you talk about extreme or aggressive growth, this is what you're getting with Corvex.
00:32:05.599 -->
00:32:11.200Now, similar to BitDeer or some of the other companies we talk about here, a number of irons in the fire.
00:32:11.279 -->
00:32:18.400So we're gonna talk primarily about the AI factory business today, but they do have their hand in a couple of other pots as well.
00:32:18.960 -->
00:32:19.759Yes, they do.
00:32:19.920 -->
00:32:28.799Uh so Corvex have three growth engines they have the AI factory, they have the token factory, and they also have assured AI.
00:32:28.960 -->
00:32:43.440The AI factory really is a scale GPU clusters for training inference uh with five times data center capacity growth already under contract by the end, as already explained, and a path to significant future growth under an exclusivity option there.
00:32:43.680 -->
00:32:54.319The token factory, which is launching this quarter, is giving developers near frontier AI model performance at a fraction of the cost uh via API.
00:32:54.480 -->
00:32:58.559Uh, so there's no requirement for a GPU cluster ownership at all.
00:32:58.799 -->
00:33:12.480And with regards to the Assured AI, this is patent pending security software protecting model weights and sensitive inference requests at runtime, and it's targeted uh regulated enterprise, federal and AI lab customers.
00:33:12.640 -->
00:33:24.799These are all high margin, upsell, built-in, um, and they can be sold as a product feature or licensed out to third-party clusters, creating a second revenue layer on top of the raw compute.
00:33:25.039 -->
00:33:38.559So um great to see they've they've not just thinking about one particular um uh revenue stream there, they've got potentially three stroke four revenue streams uh coming into the company and a really significant expansion there.
00:33:38.720 -->
00:34:00.640Uh, I just want to point out that they have, in terms of uh funding, they've had a$33 million private placement secured to fund some of these expansion plans, and that's expected to increase um performer cash and cash equivalents to approximately 55 million compared to the 22 million reported as at the end of June 2026.
00:34:00.720 -->
00:34:06.559So, already since their last quarterly update, they've managed to increase their cash position by 33 million.
00:34:06.640 -->
00:34:15.920Believe you me, when you want to deliver 20 megawatts of CSP contract, you know, you're effectively looking at a billion dollars to do that.
00:34:16.000 -->
00:34:26.960Uh, you know, you're looking at close to 50 uh million dollars per uh megawatt in terms of building the site and then putting the latest GPUs in there.
00:34:27.119 -->
00:34:42.559I think with Irons, um, if you go back to their their site at Children's, go back over 12 months ago, I think the figures they were looking at there were 16 million for the infrastructure, 29 million for the GPUs, that's 45 million in terms of total there.
00:34:42.639 -->
00:34:47.599So I would argue now maybe closer to between 45, maybe closer to 50 million there.
00:34:47.679 -->
00:35:09.440So if you're gonna look to to get that 20 megawatts online in terms of CSP, yes, it's gonna drive uh you know close to you know a billion dollars in terms of um uh short-term contracts, um, but it's gonna require a billion dollars to build, and that's how Jensen's coming up with this uh literally one-year payback.
00:35:09.519 -->
00:35:15.280Uh, once it's paid for, you're then sort of like working on a sort of a very, very big profit measure there.
00:35:15.440 -->
00:35:22.239One thing to remember you're borrowing money to to get that one billion, they've got 55 million in cash there.
00:35:22.320 -->
00:35:45.440They'll they'll do this in phases that might give them, you know, probably towards maybe uh you know, three two 250-300 million, and then when they've got the first contracts out of the way, maybe the first eight megawatts uh completed, then the revenue start coming through, they'll be able to use other revenues and and borrow more against um that uh facility to start building out phase two, phase three, etc.
00:35:45.599 -->
00:35:47.199to get to that 20 megawatts.
00:35:47.360 -->
00:35:51.119But um, an extremely positive and rosy future for Corvex.
00:35:51.280 -->
00:35:56.719Hopefully, we'll get uh far more information uh with Seth on the podcast uh later this week.
00:35:56.960 -->
00:36:03.280Yeah, and you can see a pretty extensive background for Seth there, former experience at NASA, over 180 patents.
00:36:03.360 -->
00:36:05.119So we're looking forward to hosting him.
00:36:05.280 -->
00:36:08.639And again, similar to Iron Anthony, I really like this approach.
00:36:08.719 -->
00:36:15.039They've got the bare metal, then they offer the bare metal plus software, and then the bare metal software and security.
00:36:15.119 -->
00:36:20.239So that full stack, similar to what we saw Iron do with their Mirantis acquisition.
00:36:20.320 -->
00:36:22.400Uh, so a great update on Corvex.
00:36:22.480 -->
00:36:25.360We look forward to continuing to watch that story evolve.
00:36:25.519 -->
00:36:30.320Now, another one we're watching very closely, Moses Lake Keel Infrastructure.
00:36:30.400 -->
00:36:33.920Anthony, you found an interesting job posting here on LinkedIn.
00:36:34.159 -->
00:36:42.559We dug into it a little bit more on the company website, and it looks like they're starting to get some of the key players for Moses Lake in place.
00:36:42.880 -->
00:36:43.920Yeah, they certainly are.
00:36:44.079 -->
00:36:48.159They're looking at um uh a site operations coordinator.
00:36:48.400 -->
00:36:54.559This is going to be one of two uh Keel infrastructure people on site at the brand new facility.
00:36:54.719 -->
00:36:58.239The FM operators team runs the plant, you verify it.
00:36:58.320 -->
00:37:12.400So that's the the role of the site operations coordinator, auditing preventative maintenance spot uh witnessing critical work and owning the data quality of the site CMMF system that uh the whole governance model depends on.
00:37:12.480 -->
00:37:20.000You'll also coordinate tenant service delivery and hold uh real delegated authority under the site Julie rotation.
00:37:20.239 -->
00:37:28.079Um, so yeah, big, big post there, one of the two big posts at the site, the site direct post also being advertised as well.
00:37:28.239 -->
00:37:32.400So uh things are moving ahead uh quite well at Moses Lake there.
00:37:32.480 -->
00:37:37.199We've seen the the groundworks being prepared, we've seen the permitting all being approved.
00:37:37.360 -->
00:37:43.679What we need now, Bryce, is to um hear some sort of a contract being signed uh for the power that's available there.
00:37:44.000 -->
00:37:45.360It's gotta be getting close.
00:37:45.440 -->
00:37:48.719We pulled this development progress slide from the last earnings.
00:37:48.880 -->
00:37:52.079You can see Moses Lake when they decommissioned the Bitcoin mining.
00:37:52.159 -->
00:37:58.000So, as you said about Mara, they actually had to do demolition at this site, whereas Mara maybe wouldn't.
00:37:58.079 -->
00:38:00.719Uh, it was an empty lot, essentially.
00:38:00.880 -->
00:38:03.519Now you can see the images we shared yesterday.
00:38:03.679 -->
00:38:06.079This is a full active construction zone.
00:38:06.239 -->
00:38:18.239You pointed out those two postings at Moses Lake, but if we look on their uh roles sheet here, Anthony, you can see a lot of hiring in Pennsylvania, Sharon, Scrubgrass, New York, their head office.
00:38:18.400 -->
00:38:27.280So again, we talk about the fact these companies pivoting into AI, they need to build that skill set within their teams, and that's exactly what they're doing.
00:38:27.440 -->
00:38:30.719Now, the final news story of today, Bit Digital.
00:38:30.960 -->
00:38:39.440We talked last week about the difference between a DAT, so a digital asset treasury company, and a SAC, a strategic asset company.
00:38:39.599 -->
00:38:41.280This was a very timely interview.
00:38:41.440 -->
00:38:42.559We'll play you the clip here.
00:38:42.800 -->
00:38:55.039Sam essentially explaining the difference and how he's looking at Ethereum in combination with AI as these two intersecting massive investment trends of our lifetime.
00:38:55.360 -->
00:39:01.840And we decided to position ourselves as something called a strategic asset company, which is very different from a digital asset treasury company.
00:39:01.920 -->
00:39:02.079Yeah.
00:39:02.239 -->
00:39:05.920So BMR and SBET are trade are our data.
00:39:06.559 -->
00:39:20.559But what we are is is a strategic asset company in that we have a lot of Ethereum in our balance sheet, whilst at the same time we own uh a controlling uh shareholding of something called white fiber, which is an AI company listed on Nasdaq.
00:39:21.280 -->
00:39:28.639And one of the reasons we wanted to do that is because we wanted to be on the intersection of artificial intelligence and Ethereum.
00:39:28.880 -->
00:39:37.679And we're the only capital markets proxy in the whole world that has that intersection, and we believe eventually that agentic AI is going to be run on Ethereum.
00:39:38.079 -->
00:39:42.480And so nobody has that intersection yet, and we just wanted to get ahead of it.
00:39:42.639 -->
00:39:57.599So by owning white fiber and by owning Ethereum, we are basically a capital markets markets proxy for what is the ultimate expression of what we believe the future will be, which is this agentic economy that's run on Ethereum.
00:39:57.920 -->
00:40:07.679Yeah, this is this is following on from the you know the sort of like the the twin um asset categories that uh Bit Digital hold on their balance sheet.
00:40:07.840 -->
00:40:12.960Remember, they've got a significant amount of uh Ethereum over 164,000.
00:40:13.199 -->
00:40:18.880Ethereum price, just like the Bitcoin price, has been rallying a late over$2,700 today.
00:40:19.119 -->
00:40:22.639Still a little bit way to go to last um October-November's high.
00:40:22.719 -->
00:40:36.159I think it was about$5,000 then, but you can see uh you know it's started to move up, it's been correlating with Bitcoin very, very well this year, and actually, I think if you take the year-to-date position, it's actually ahead in terms of percentage points there.
00:40:36.320 -->
00:40:45.840At the same time, Bit Digital have um ownership of 60% of white fiber's share uh count as well, so a significant amount of value.
00:40:45.920 -->
00:40:47.679We covered it in more detail yesterday.
00:40:47.760 -->
00:40:58.559I think the net asset value is um 22% higher than the actual share price at the moment, so the shares are being offered at effectively a discount to net asset value there.
00:40:58.719 -->
00:41:10.400This is the only company that we talk about on a daily basis where the net asset value is is is higher than the mark the actual share price, so uh that gives you an indication there.
00:41:10.559 -->
00:41:17.760Um, don't take one metric and we'll rush out there, start buying uh bit digital, but but use it as part of your due diligence out there.
00:41:17.840 -->
00:41:20.000It's certainly one of the metrics that you would look for.
00:41:20.079 -->
00:41:24.079How much value am I getting when I'm buying a dollar's worth of shares from the company?
00:41:24.239 -->
00:41:29.360Well, for buying a dollar's worth of shares in bit digital, you're getting a dollar 22 of assets supporting that.
00:41:29.440 -->
00:41:35.199So if everything went wrong there, they could sell the Ethereum on the market and they could sell it very, very quickly.
00:41:35.280 -->
00:41:46.800You could sell the shares in in white fibre as well, which is uh effectively their HPC AI uh company, and uh you know they'd be able to pay shareholders back from that.
00:41:46.880 -->
00:41:50.880Um uh but um yeah, it's uh it's a it's an interesting point of view.
00:41:50.960 -->
00:41:59.920Remember where Sam's background is not just a lawyer, he's also been in the financial markets and he understands best than most of the people I speak to in the space.
00:42:00.159 -->
00:42:02.159Yeah, I think I gotta agree with you, Anthony.
00:42:02.239 -->
00:42:08.239And according to Sam, he's saying this is the only public company that gives you Ethereum and AI exposure.
00:42:08.320 -->
00:42:09.840So definitely an interesting one.
00:42:10.079 -->
00:42:16.239Goes back to your initial point today about fundamental analysis, understanding these companies inside and out.
00:42:16.400 -->
00:42:23.119That way you don't worry about the volatility, you don't get shaken out of your positions, and you can see the value when it presents itself.
00:42:23.360 -->
00:42:25.679Now, we've talked a lot about AI today.
00:42:25.840 -->
00:42:28.639We are revamping the power analysis website.
00:42:28.719 -->
00:42:32.719You can see now focused specifically on AI HPC.
00:42:32.800 -->
00:42:41.599We've got the new avatar there, and working through the deal analysis and data tables as we speak for each and every one of these companies.
00:42:41.679 -->
00:42:46.960So, more to come there, plus all of our interviews, podcasts, and newsletter sign up.
00:42:47.039 -->
00:42:55.199So, with that being said, let us know your thoughts on Governor Abbott's big announcement, the impact to Texas, and the companies in your portfolio.
00:42:55.360 -->
00:42:56.639We'll be back here tomorrow.
00:42:56.719 -->
00:42:58.480Thanks so much for watching.
