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The crypto-to-AI pivot continues. Today we’re covering the latest company to cross the picket line and change its title from ‘Bitcoin miner’ to ‘AI datacenter’.
First, a quick detour.
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A NEW $2.3B BET ON AI'S POWER PROBLEM 🔌
In April, Bitfarms (one of the bigger public Bitcoin miners) renamed itself Keel Infrastructure (KEEL), shut down its U.S. mines and started pitching its land and power to AI companies.
It's been a big year for the stock, and our AI analyst Melvin took the whole thing apart for PRO members last week.
Neoclouds like Nebius and CoreWeave own GPUs (the chips AI models run on) and rent out that computing power.
Keel wants to supply AI companies with the land, power, cooling and buildings that hyperscalers (giant cloud companies like Amazon and Google) and AI labs need before the GPUs get plugged in.
Melvin likes these kinds of businesses, because power is becoming the biggest bottleneck in the AI buildout.
The way he put it: you can order another batch of GPUs, but you can't magically create a few hundred megawatts of approved electricity in the right place by next year.
… and Keel has 648 megawatts (MW) of secured power, with ~2.2 gigawatts (2,200 MW) in its total development plans.
Melvin says to be VERY careful with that bigger number though, since everything beyond the 648 MW is still expansion options and utility studies.
(I.e. Don't slap a crazy dollar value on 2.2 GW and call it a $10B company.)
Most of the secured power sits across three U.S. sites, plus ~170 MW in Québec. 👇
- Panther Creek (Pennsylvania) is the crown jewel, with 350 MW and room to grow past 500 MW.
- Sharon (Pennsylvania) adds ~110 MW.
- Moses Lake (Washington) is only 18 MW, though it's set to become Keel's first working AI data center in 2027.
But this is where Melvin's biggest worry comes in…
Keel has zero AI data center revenue today.
Its $30M of Q2 revenue came almost entirely from Bitcoin mining that it has since shut down, and the company lost $65M in the quarter.
Buying KEEL today means buying power plus a bet that management can sign tenants, finance construction and deliver on time.
(Panther Creek's final environmental permits are also running a few months late.)
The good news is the balance sheet buys some time.
Keel had $819M of cash and Bitcoin as of August, and ~$1.05B of convertible notes (loans that can later turn into shares) at super cheap rates of 1.25% to 1.375%.
He gives management credit for that cheap financing - but hundreds of MWs of data centers cost a fortune, so he expects Keel to need more (possibly through share sales).
Keel also hired Ganesh Aiyer (ex-Digital Realty, a giant data center landlord) as President.
Melvin thinks that's exactly the right hire, since getting a hyperscaler to sign a 10 or 15 year lease is a different skill set than finding power.
Which brings him to Keel’s peers…
Melvin puts them next to TeraWulf (WULF), Hut 8 (HUT) and Cipher (CIFR), other ex-miners making the same pivot.
Those three have already signed AI deals involving Anthropic, Amazon and Google.
If a hyperscaler or AI lab takes hundreds of MW at Panther Creek, Melvin says things could change for Keel.
Problem is, the market is already starting to notice.
At ~$3.70 a share, Keel is worth ~$2.3B, and the stock is up ~55% this year (even after sliding from a $7.37 high in June).
Melvin thinks a good chunk of that optimism is probably already priced in.
On one hand - a big tenant could still send it a lot higher.
On the other, any permitting delays or big capital raises could hurt it.
So where does that leave us?
Melvin just revealed exactly what he’s doing with KEEL inside Milk Road PRO. Try PRO for a buck for 7 days, here!
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