ALBANY, N.Y. - Soluna Holdings, Inc. (NASDAQ: SLNH), known for developing green data centers, has raised a $12.5 million credit facility for its subsidiary Soluna Cloud, Inc. This marks the initial phase of a larger fundraising campaign, with BitOoda Technologies and Imperial Capital leading the efforts.
The funds are earmarked for the launch of Soluna Cloud, which will provide hosting services for generative AI workloads, utilizing NVIDIA (NASDAQ:NVDA) H100 GPUs and a 3-year managed-services agreement at a Tier 3 hydro-powered data center. Soluna has partnered with a strategic OEM to ensure the operation is powered entirely by renewable energy and has a zero water consumption policy.
Soluna Cloud is projected to yield annual revenues ranging from $16 million to $26 million once fully operational, with total expected revenues between $38 million and $80 million over the life of the contract. The service, targeting enterprise customers and Generative AI Labs, is set to go live as early as July 2024.
John Belizaire, CEO of Soluna, emphasized the significance of the venture, stating that it represents a crucial step for Soluna Cloud. He highlighted the potential of AI to revolutionize enterprise operations and Soluna's commitment to fostering environmentally responsible AI development.
The forthcoming services will focus on large language models with at least 70 billion parameters, offering advanced capabilities for enterprise-grade generative AI applications. Customers interested in the service can join the waitlist at SolunaCloud.com.
Soluna's broader strategy includes the development of innovative Helix data centers, which are expected to complement the company's AI Cloud implementation. With a focus on sustainability, Soluna Cloud's initiative is positioned to address the increasing demand for eco-friendly AI infrastructure solutions.
The details of the financing and the strategic partnership will be disclosed in Soluna's upcoming 8-K filings with the U.S. Securities and Exchange Commission.
In other recent news, Soluna Holdings has secured a $34M cloud services deal with Hewlett Packard Enterprise Company (NYSE:HPE), expected to generate substantial revenue between $16.0 million to $26.0 million annually. This contract also anticipates total revenue ranging from $38.0 million to $80.0 million over its duration.
Soluna Holdings also reported robust first-quarter results for 2024, indicating a significant increase in Quarterly Adjusted EBITDA and a rise in cash reserves.
The company has also secured a 166 MW Power Purchase Agreement (PPA) with EDF (EPA:EDF) Renewables and Masdar for Project Kati in Texas, which is expected to considerably enhance hosting capabilities.
The company has also announced the appointment of John Tunison, a veteran in the global energy sector, as its new Chief Financial Officer. Tunison will focus on capital allocation for the company's growing data center projects. These recent developments reflect Soluna Holdings' consistent efforts to expand its green data center and hosting services.
InvestingPro Insights
As Soluna Holdings, Inc. (NASDAQ: SLNH) gears up for the launch of Soluna Cloud, recent data and analysis from InvestingPro provide a deeper look into the company's financial health and stock performance. Amidst the excitement of the new venture, Soluna's financial metrics and stock activity suggest a complex picture.
InvestingPro Data shows that Soluna's market capitalization stands at $20.55 million, with a notable revenue growth of 36.84% in the last twelve months as of Q1 2024. This growth trajectory aligns with the company's ambitious plans for Soluna Cloud. Additionally, the company has experienced a significant 113.27% return over the last month, indicating strong investor confidence in the short term.
However, two InvestingPro Tips highlight potential areas of concern for investors. Firstly, Soluna is quickly burning through cash, which may raise questions about long-term sustainability despite the recent credit facility. Secondly, the company's stock is considered to be in overbought territory according to the Relative Strength Index (RSI), suggesting that the current price may be higher than the underlying value.
For investors looking for further insights, there are 12 additional InvestingPro Tips available for Soluna Holdings, Inc. These tips can provide a more comprehensive understanding of the stock's potential and risks. To access these tips and enhance your investment strategy, visit https://www.investing.com/pro/SLNH and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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