Why did digital use blockchain drop from its original name
Full video transcript below
Sara Silverstein: Applied Digital instead of Applied Blockchain.
Wes Cummins: Yes
Sara Silverstein: So everything went from crypto to blockchain. And now everything will go digital, or why did you change your name?
Wes Cummins: Yeah, so the name change is really just that it’s kind of a signal that we’re expanding our scope. And so we’re building what I see as digital infrastructure for sort of the next generation of high compute, high performance data blockchain crypto. There are applications that go in there. But we’re looking at other applications that you’ll see being deployed in our data centers, and I’m sure we’ll be deploying our data centers by the end of the year. And there are things like number one, probably machine learning, AI, protein sequencing, gene sequencing. All of these things require intense computing power, but don’t necessarily need ultra-low latency communications, which is what, you know, most traditional data centers are built for right now, is video streaming, right? So you use video streaming for ultra-low latency communication. Now we’re moving to what I think is sort of the next generation, which is high-performance computing, which is for many other applications that people will use, natural language processing. You know, you want to talk to your phone, have it, understand what you’re talking about. You want an autonomous car that drives you. It takes a lot of data crunching to put everything in the model to create it. So you build a bunch of really powerful data centers.
Sara Silverstein: Are these the same as the ones I remember reading about when they built them out in Vegas to run sites? How are they similar or different?
Wes Cummins: So they’re the same in that you’re going to host hardware, right? You will host servers, you will have high speed fiber communication. You will have all cyber security. You’re going to have everything you do and racks and servers inside these. What is different is actually the application. So there are applications that don’t need the ultra-low latency. As I talked about machine learning, artificial intelligence, you know, some of these need ultra-low latency, but let’s say 80% or 90% don’t. And they just need high, high performance computing, lots of calculation cycles, crunching lots of numbers. And so we built these data centers that started with crypto, you know, started with crypto and we’re still very focused on Bitcoin hosting. That’s what almost our entire business is now. But we can expand. We have these sites that are in, you know, they tend to be in remote locations. They tend to have very good power contracts, which is important these days, isn’t it. We see electricity prices going up in the US and around the world. We need ultra-low electricity costs, fairly stable electricity costs. And where we’ve found these are in generally remote locations where there’s a lot of power generation that doesn’t have distribution to get out of that area or what we call congestion, right? An overload on the web. And then we found most of it in wind farms to start. So in Ellendale, Jamestown has this as well, and in Garden city, Texas, these are wind farms that are built so that there is not enough transmission capacity to get all the power out. So we co-locate with these wind farms because we can bring the application right to them. So the low cost power is number one. Number two is that we prefer cold climates because we like to use air. Cool when you use a lot of data, power creates a lot of heat. Air cooling it keeps it cooler. And then we will be in places that want us. We do a good job in community relations and in the local area at the state level, but we definitely want to be in states that want us to be there.
Sara Silverstein: And your customers are Bitcoin miners. How do the crypto markets affect the types of trends you see in how your data centers are used?
Wes Cummins: Absolutely. So we’re sitting on top of the pile, right? We operate on fixed price contracts. And then we have the customer who contracts on one side and then we have the energy. On the other hand, we have a pretty good contract for energy. It is always a little variable. It is that you cannot get a completely fixed price in the energy markets. We can get pretty close. And so the price of Bitcoin doesn’t affect us day to day, but you know, it has to be healthy to keep our customers healthy over time. The only thing we can do about it. And we work hard to be the low-cost supplier in the industry, right? So we have to be as low cost as we can be. So that our customers stay healthy. Then I think we do a good job with that. And the two things for that, our low cost power contracts and the other part of that is, is uptime, uptime in the industry like running their machines because we run them for them is critical because the hardware is very expensive. And so you want the hardware to be up, you know, 98, 99% of the time. In this industry, you don’t get five-to-nine reliability like you get telecom, but if you can get north of 95% to 96%, you’re doing a very good job. And we do that now. And I think we’re our team has done a really good job with ops. So for us, we’re sitting at the top of the stack, but we need our customers to stay healthy, and as it is, you know, it wouldn’t hurt to have better Bitcoin prices. And then number two, we just have to run a very efficient, affordable operation for them.
