Hyperscale Data Launches Lyken.AI AI Business, But Core Risks of Dilution and Unproven Revenue Remain Unchanged

What happened

Hyperscale Data, through its subsidiary Alset AI, announced the full commercial launch of Lyken.AI, a flagship AI venture offering end-to-end services, software, and infrastructure to organizations. This move aligns with the company's strategic pivot toward AI data centers, as detailed in the master report, which highlights GPUS's reliance on Bitcoin mining and planned Michigan GPU cloud expansion. However, the announcement lacks concrete metrics such as revenue figures, customer contracts, or hardware commitments, mirroring the report's criticism of unproven AI economics and promotional messaging. The master report underscores severe challenges, including a ~94% share price decline over the past year, heavy at-the-market equity issuance driving dilution, and negative free cash flow of -$20.3 million in Q3 2025. Thus, while the launch signals progress in AI commercialization, it does not address the fundamental execution risks, dilution, or Bitcoin volatility that underpin the 'POTENTIAL SELL' rating.

Implication

Investors should critically assess this announcement as it offers no financial or operational details to validate Lyken.AI's viability, such as revenue run rates or customer adoption. The company's reliance on dilutive equity raises to fund expansion, with share count increasing ~17x in 2025, continues to erode per-share value despite balance-sheet growth. Without executed Michigan power LOAs or disclosed GPU cloud revenue—key milestones flagged in the master report—the AI thesis remains speculative and pre-revenue. The 'asset-backed' narrative tied to Bitcoin is volatile, and any AI growth must outpace dilution to create shareholder value, which has not been demonstrated. Consequently, for value-oriented investors, this news does not improve the risk-adjusted return profile, maintaining the recommendation to avoid or trim positions until substantive progress is shown.

Thesis delta

The launch of Lyken.AI does not materially shift the investment thesis, as it represents a step in AI commercialization without addressing core concerns. Key risks—ongoing dilution, lack of binding Michigan power agreements, and absence of proven AI revenue—persist unchanged from the master report's analysis. The thesis remains a 'POTENTIAL SELL,' with any upside contingent on future execution that delivers $10M+ in annualized GPU cloud revenue by end-2026, as outlined in the 'What Changes The Call' criteria.