Wes Cummins: So on the demand side, the only thing that has changed on the demand side is we’re seeing a new group come into the market as I mentioned in my prepared remarks. So the demand remains extremely robust on the VC-backed startup companies. But what we’re seeing in the market is what we’re referring to as enterprise customers. So these, and just so I can define enterprise customers, these are companies that generally are very large companies, typically publicly traded, typically north of $50 billion type of market cap that have a business. They already have a business. And now to me, what it feels like is they have been working on their AI strategy, they have landed on what they plan to do with their AI, and now they’re looking for significant amounts of GPU capacity.
So that’s a new element for us. We have one of those customers that we’ve been working with for about two months now, and they’ve moved into what we call — we all call it a proof of concept, which is basically a test drive of our infrastructure. And I think we could get that customer into contracting here in the next two to three weeks. But that’s been the only change, which is increased demand, but from a different segment of the market. The way I’ve looked at this market, it is a bit of a barbell, right? It’s — on one side you have the hyperscalers, so this was last year, you have the hyperscalers on one side and then you have the VC startups on the other side and then kind of there was nothing in the middle and now we’re seeing that piece in the middle start to show up.
George Sutton: Perfect. Thank you for the details.
Wes Cummins: Absolutely. Thanks, George.
Operator: Our next question is from Darren Aftahi with ROTH MKM. Please proceed.
Darren Aftahi: Hey, good morning. Thanks for taking my questions. Just two, if I may. I think if I heard you correctly, pricing has kind of gone up on the GPU side. I think, Wes, maybe [say] (ph) on an annualized basis with the 10,000, you’d be over $200 million. I’m just kind of curious. I think at the Analyst Day, which is not too long ago, you talked about the $1.5 million monthly run rate. I guess what’s changed? And then on the GPU side, I know you are targeting 10,000 by the end of your fiscal year. I guess given there’s some uncontrollables on components, what’s your level of confidence in that 10,000 number?
Wes Cummins: Sure. So, yeah, Darren, you’re right. The pricing has gone up some. So what we’re seeing — the number I gave before is with one of our largest customers, and we were pricing that at around $2 an hour on the GPU capacity and our reserve contract. What we’re seeing now is for most of our customers, we’re signing contracts and what it looks like in the marketplace is kind of in the $2.20, $2.25 range for two-year reserve contracts and somewhere between 20% and 30% prepayments on the contracts. So that’s the color on the kind of the update on pricing. And then on the 10,000, that’s a number — we took that down from the 26,000. So the original for us was 26,000. We had co-location capacity for 26,000. And where we are now is just with the slowness on the component side for InfiniBand.
The 10,000 is a number that we feel really comfortable with hitting. We feel really comfortable in multiple ways, both on delivery of the GPUs, but also on the financing of the GPUs without going outside to a larger debt piece that has been done by some of the players in the market. So we feel really comfortable on both sides of that. But that’s the reason we gave that guidance. However, what I would say about that is I think there’s more we can do on the GPU side. So we’ll have the 4,000 plus 4,000 shortly. So call it mid-February, we’re at 8,000 of those clusters of the 10,000 that we’re guiding for. So I think that leaves us plenty of room between there and the end of May.
Darren Aftahi: Well, I’m going to squeeze one more in. On Garden City, just looks like it obviously didn’t ramp as fast as everyone expected. With the grid components, can you just maybe talk a little bit about maybe what is needed, how quickly those can get procured? And then I’m just kind of curious, your propensity to continue to do business maybe with the next site in somewhere like Texas, like, how would you kind of grade that in terms of wanting to do business in a place like Texas? Thanks.
Wes Cummins: Yeah, I mean, I live in Texas. I love it there. So I don’t want to say anything bad about Texas, so I’ll leave that. But the sites we’re doing in the future right now are North Dakota and Utah. So those are the two areas we’re working on. I think we’ve talked about this in the past. We’re out looking for more capacity because of the demand we see in the market. We have a pipeline of additional capacity that’s north of 1 gigawatt. So we’re working through that. And then, specific to the Texas site, there’s some improvements. I’m going to butcher this a little bit, but I think we need a little resiliency, which is a capacitor bank put in, not specifically in our location, but a substation that’s in the area to get fully up to the 200.
There’s two ways to go there. There’s getting approved for wind plus grid is one route, and the other is this, I think it’s a capacitor bank that needs to be installed, and not a huge expense on that, by the way. But we’ve been working on that since either late November or December. And the guidance that we gave is what we view as the worst case scenario, which would be the April time frame for that — the remainder of that to come on. So we’re basically waiting for the last 65 megawatts to come on there.
