Alset Capital Inc.'s (TSXV: KSUM) (OTC: ALSCF) (FSE:1R60, WKN: A3ESVQ) mission is to drive significant shareholder value through the acquisition and development of AI assets. Alset aims to position its investment portfolio to become the leading publicly listed pure-play AI computing provider. Accelerating that mission, Alset announced its successful listing on the Frankfurt Stock Exchange (the "FSE") under the trading symbol "1R60", WKN: A3ESVQ, ISIN: CA02115L2003, and to the OTC market (OTC: ALSCF), which significantly expands its reach and potential shareholder base to the European and U.S. markets.
The inclusions create a market beyond the one made on the Toronto Stock Exchange Venture in Canada and, as importantly, will help accelerate its global expansion strategy and give access to international capital markets. Moreover, the combined listings with the world's largest trading centers for securities provide Alset with enhanced liquidity and exposure to global investors, reinforcing its market presence.
The listing strategy and the exposure from it are working. Interest in Alset Capital is growing, resulting from its intrinsic strength to become a key player and contributor to an Artificial Intelligence (AI) and cloud computing sector that, despite its popularity, is still in its early stages of development. Listening to analysts speak about Tesla (NASDAQ: TSLA), NVIDIA (NASDAQ: NVDA), and Advanced Micro Devices (NASDAQ: AMD), all part of the Magnificent Seven, that assessment makes sense.
After all, harnessing all the potential power of AI may be a never-ending mission, and with it, ushering in a generational shift in how technology is used to produce, grow, manufacture, and create a better quality of life for global populations.
Alset Capital Leverages Key AI-Sector Assets
Alset’s investee Cedarcross’s mission is not just about financial gains, but also about leveling the playing field for people and governments. The company’s investee Cedarcross International Technologies Inc. (“Cedarcross”) aims to democratize access to high-performance AI computing, which can assist them from a logistical, financial, and productivity perspective. This intention puts Alset in the right place at the right time, considering that in the dynamic landscape of artificial intelligence, where compute power is the new currency, Alset has the tools and expertise to serve as a pivotal contributor in driving the AI revolution forward. This mission aligns with the values of many potential investors, making Alset an attractive investment opportunity.
On the technology and assets side, Alset has made strategic investments in Cedarcross and Vertex AI Ventures Inc. (“Vertex”) These investments, backed by significant ownership interest, underscore Alset's commitment to democratizing specific parts of the AI landscape. Alset’s cornerstone AI investments is comprised of 49.0% ownership stake in Cedarcross and Vertex. This strategic approach instills confidence in Alset's investment decisions and its potential to deliver potentially significant investment returns.
Cedarcross's vision is to become one of Canada's largest high-performance AI computing providers. Cedarcross's mission is to democratize access to high-performance AI computing by offering access to the world's fastest AI computing servers, powered by Nvidia GPUs, heralding a new era of technological advancement. Last week, the company signed an agreement with an arm's length counterparty to distribute 64 Nvidia H100 HGX 8GPU servers, generating $26 million in revenue and an expected $2.8 million gross profit for Cedarcross. This distribution deal is incremental to its $2.3 million distribution deal previously announced on April 22, 2024. With these two distribution deals, Cedarcross has achieved approx. $28 million cumulative revenue year to date with its high-performance computing (“HPC”) server distribution business vertical alone. These deals may be the prelude to more distribution deals to come. In addition to its high-performance computing (HPC) server distribution business vertical, Cedarcross’s core business vertical is it’s compute leasing vertical, which on April 25, 2024 they announced a two-year $5.5 Million cloud computing leasing agreement which is expected to generate a gross margin of $4.4 million over the duration of the term. By offering access to the world's fastest AI servers powered by Nvidia GPUs, Cedarcross empowers small to medium enterprises (SMEs) with high-performance computing capabilities of approximately 700,000 hours at present, with plans to increase its capacity in the future.
Leveraging Key Business Relationships
Cedarcross strategically hosts its servers with a leading North American data center provider, boasting an extensive network of over 40+ facilities across key markets, ensuring seamless connectivity and reliability. This arrangement fortifies Cedarcross's infrastructure with essential features like fiber optic connectivity, UPS backup, and localized computing capabilities.
Cedarcross's strategic approach to leasing compute resources to SMEs demonstrates a clear pathway to significant revenue growth. By facilitating the training of AI workloads, Cedarcross plans to generate cash flows and scale its hardware infrastructure fleet to meet evolving market demand for computing. Leveraging its industry-leading partners, Cedarcross is poised to drive streamlined growth and innovation in the AI sector.
Cedarcross's AI computing hub of 5 initial Nvidia H100 HGX servers is fully installed and operating in a Tier 3 data center. Powered by the Nvidia HGX 100 GPU servers (each of which has 8 Nvidia H100 GPUs), Cedarcross boasts GPU infrastructure that, when fully delivered and installed, is expected to immediately start to generate USD ~$2 million per year, with associated anticipated yearly net cash inflows of USD $1.6 million.
Providing An Infrastructure, Not Just A Server
Cedarcross has the foresight and knowledge of the lead time and execution required to build AI computing hubs, extending beyond simply acquiring GPU servers. Over the last several months, Cedarcross has worked diligently to order, set up, and initiate this AI computing hub. Cedarcross has five Nvidia HGX H100 GPU servers delivered and installed, which are interconnected using the Infiniti brand network. Each server is linked to eight 400GB optical modules, ensuring optimal efficiency between the servers.
Well-fortified with its high-performance computing hardware, specifically Nvidia H100 HGX 8GPU servers, Cedarcross has positioned itself to revolutionize AI computing infrastructure. This is different from what many companies do, or better said, trying to do in the sector. That's potentially excellent news from a company and investor perspective. Remember, most of the market high-flyers are companies in the chip segment, the engines, if you will, to power and serve the demand from the thousands of companies competing for client and investors' attention. While there are many facets to what they want and need, one thing remains constant: AI requires massive amounts of specialized computing power.
Vertex, Alset's other strategic investee company, is at the forefront of intellectual property (IP) identification and acquisition, as well as providing AI data management services. The company’s mission is to discover and acquire innovative AI intellectual property from early-stage ventures, fueling advancements in artificial intelligence. In the realm of data management, Vertex AI Ventures aims to excel in delivering premier services that harness the power of AI to streamline operations, minimize costs, and secure a competitive edge in the increasingly data-driven world. The comprehensive suite of services offered by Vertex AI Ventures ensures superior data quality and security, offering advanced observability insights, machine performance optimization, and real-time analytics tailored to AI computing infrastructures. Specializing in data retention and disposition solutions, Vertex AI Ventures addresses critical issues of data security and compliance,
Capitalizing On Specialization
That's in Cedarcross's business wheelhouse. They provide turnkey, high-performance AI cloud computing hardware solutions to SME clients. That differentiation is more than good from a client services perspective; it presents a pure-play investment opportunity in high-level artificial intelligence and cloud computing technology.
Keep in mind that the demand for specialized computing power, particularly GPUs developed by Nvidia, actually helps expose the critical role Cedarcross plays in advancing segments of the AI space, primarily through leasing computing power to enterprise clients and then streamlining AI training models and agent development to expedite harnessing AI's client-specific transformative potential.
There's more to appreciate.Cedarcross's ownership and operation of Nvidia H100 HGX 8GPU servers place it in a unique position within the AI computing landscape. Scarcity and high demand for such hardware often necessitate strategic partnerships and supply chain relationships, areas where Cedarcross excels. More than excel, the Cedarcross business model is attractive, with anticipated gross margins on leasing H100 server space estimated at approximately 80% contributing to a rapid payback on hardware investments. That keeps the company growing and, most importantly, well-positioned competitively.
Industry Veterans Lead With Sector-Specific Expertise
By the way, growth is no coincidence.Alset’s leadership team is led by CEO Morgan Good and supported by seasoned AI professionals like Roger He. Its portfolio company, Vertex, is led by Niko Kontogiannis, who brings a wealth of experience in venture capital, finance, and technology sectors. Moreover, their collective vision aligns with industry trends highlighted by prominent figures who emphasize the pivotal role of computing power in shaping the future of technology.
In a recent interview, one of the sector's leading thought leaders shared thoughts on the future of technology, emphasizing the significance of computing power by referring to "compute" as the "currency of the future" instead of fiat or cryptocurrency, adding to his belief that "compute" will become the most valuable commodity in the world, stressing the need for substantial investments to increase computing capabilities—not a small amount, either.
TRILLIONS in funding will be needed to compete with Nvidia and TSMC in the semiconductor manufacturing industry. Here's the critical thing to understand: Don't consider those wanting a piece of the sector action as new competitors entering the market; it's quite the opposite. The interest actually shows just how substantial Nvidia's technological advantages are regarding AI computing hardware and the potential to seize opportunities where they aren't directly focused. While it may take decades and trillions to catch up, it exposes how significant the opportunities are for companies to capitalize on and fill the service gaps.
Working To Maximize its Opportunities
Alset certainly wants to earn its share. To accelerate that intention, it can utilize the capital raised from its two recently completed non-brokered private placements for gross proceeds of $7.6 million in aggregate between March and May 2024, that position it to advance strategic initiatives, and, as important in many respects, emphasize investor confidence in the company's direction and ability to capitalize on and maximize its potential.
It's often said in the investment world...follow the money. In this case, it may be wise to agree, recognizing that Alset has an asset arsenal to capture its share of the burgeoning AI market by leveraging its investments in Cedarcross and Vertex. Both can drive innovation and unlock value for shareholders. And as AI continues to permeate various industries, Alset’s role as a cutting-edge AI computing infrastructure facilitator, through at least two compelling assets, makes it investment-worthy.
Considering its global market listings, many get that chance.
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