Full Video Transcript Below
Sara Silverstein: Applied Digital instead of Applied Blockchain.
Wes Cummins: Yes
Sara Silverstein: So everything went from crypto to blockchain. And now is everything going to move to digital, or why did you change your name?
Wes Cummins: Yeah, so the name change really is just it's kind of the signal that we're broadening our scope. And so we're building what I view as digital infrastructure for kind of the next generation of high compute, high performance compute blockchain crypto. Those are applications that go in there. But we're looking at other applications that you'll see is put into our data centers, and I'm confident we'll put in our data centers by the end of the year. And those are things like, number one, probably machine learning, AI, protein sequencing, gene sequencing. All of these things are require intense computing computational power, but don't necessarily need ultra low latency communications, which is what, you know, most traditional data centers are built for right now is video streaming, right? So you use video streaming for ultra low latency comms. Now we're moving to what I think is kind of the next generation, which is high performance computing, which is for a lot of other applications that people want to use, natural language processing. You know, you want to talk to your phone, have it, understand what you're talking about. You want to have an autonomous car that drives you. It takes a lot of data crunching to put everything in the model to create that. So you're building a bunch of really powerful data centers.
Sara Silverstein: Are these similar to ones that I remember reading about when they were building them out in Vegas to power websites? How are they the same or different?
Wes Cummins: So, they're the same in that you're going to host hardware, right? You're going to host servers, you're going to have high speed fiber comms. You're going to have all the cybersecurity. You're going to have everything that you do and racks and servers inside of these. The thing that's different is really the application. So there's applications that don't need the ultra low latency. Like I was talking about machine learning, artificial intelligence, you know, part of those need the ultra low latency, but let's say that 80% or 90% do not. And they just need high, high performance computing, a lot of compute cycles, crunching a lot of numbers. And so we purpose built these data centers that started with cryptos, you know, started with crypto and we're still really focused on Bitcoin hosting. That's what almost all of our business is now. But we can expand. We have these sites that are in, you know, they tend to be in remote locations. They tend to have really good power contracts, which is important these days, right. We see the electricity prices going on in the U.S. and worldwide. We need ultra low power costs, fairly stable power costs. And where we have found those is in generally remote locations where there's a lot of power generation that doesn't have distribution to get out of that area or what we call congestion, right? A congestion on the grid. And so we found mostly in wind farms to start. So in Ellendale, Jamestown has this as well, and in Garden city, Texas, these are wind farms that are built that there's not enough transmission capacity to get all of the power out. So we co-locate with these wind farms because we can bring the application right to them. So the low cost power is number one. Number two is we prefer cold climate because we like to use air. Cool when you use a lot of computing, power creates a lot of heat. Air cooling it keeps it cooler. And then we want to be in places that want us. We do a great job at community relations and in the local area at the state level, but we definitely want to be in states that want us to be there.
Sara Silverstein: And your clients are Bitcoin miners. How do the crypto markets impact what types of trends you're seeing in how your data centers are used?
Wes Cummins: Absolutely. So we sit at the top of the stack, right? We operate on fixed price contracts. And then so we have the customer contracting on one side and then we have the energy. On the other side and we have a pretty good contract on the energy. It's always a little bit variable. It's you can't get perfectly fixed price in energy markets. We can come pretty close. And so the price of Bitcoin doesn't impact us day to day, but you know, it needs to be healthy to keep our customers healthy over time. The one thing that we can do about that. And we work really hard on is being the low cost provider in the industry, right? So we need to be as low cost as we can possibly be. So that our clients stay healthy. Then I think we do a good job of that. And the two things for that, our low cost power contracts and the other part of that is, is uptime, uptime in the industry like running their machines because we run them for them is imperative because the hardware is very expensive. And so you want that hardware to be up, you know, 98, 99% of the time. In this industry, you don't get five-nines reliability like you get telecom, but if you can get North of 95% to 96%, you're doing a really good job. And we do that now. And I think we're our team has done a really good job on ops. So so for us we do sit at the top of the stack, but we need our customers to stay healthy and the way that is, you know, wouldn't hurt to have better Bitcoin prices. And then number two, we just have to run a really efficient, low cost operation for them.