Digi Power X Spends $20M on AI GPUs, But Missing Contracts Keep Thesis on Hold

What happened

Digi Power X announced a definitive agreement to acquire approximately $20 million of NVIDIA B300 GPUs from Super Micro Computer, deploying them in its Tier III AI data centers and NeoCloudz GPU-as-a-Service platform. This move aligns with the company's pivot from Bitcoin mining to AI infrastructure, as detailed in the DeepValue report, which highlights a strategic focus on scaling AI IT load to up to 50 MW in 2026. However, the report critically notes that despite similar prior investments like B200 clusters, Digi Power X has no disclosed material AI colocation or GPU service contracts, leaving revenue unproven. The company's reported liquidity of ~$100M, while debt-free, stems from crypto appreciation and equity issuance rather than durable operating cash flow, which remained negative at -$14.4M in Q3 2025. Thus, this GPU purchase represents continued capex toward the AI build-out but does not address the core risk of uncertain customer demand for its services.

Implication

The $20M GPU purchase advances Digi Power X's AI infrastructure deployment but does not secure revenue, as utilization hinges on signing multi-year AI contracts that are still absent. Without such contracts, the new capacity risks underutilization, perpetuating negative free cash flow and reliance on volatile crypto assets and equity dilution for funding. This lack of proven demand means the stock's current price, which already factors in a successful AI pivot, offers little margin for error if contract timelines slip. Management's capital allocation discipline will be tested, as further dilution could pressure per-share value if AI revenues fail to materialize alongside the capex. Consequently, investors must closely monitor for disclosed AI contracts in the next 6-12 months, as emphasized in the DeepValue report's re-assessment window, to validate the investment thesis.

Thesis delta

The acquisition of B300 GPUs is fully consistent with Digi Power X's existing AI roadmap and does not shift the core investment thesis, which remains that the stock is overvalued without evidence of contracted AI revenues. The 'WAIT' rating and key triggers—such as securing ≥20 MW of AI contracts by Q4 2026 for an upgrade or facing liquidity declines for a downgrade—are unchanged, as this news provides no material progress on demand validation.