TL;DR:
- GenAI, listed as AICO and AICOF, announces a pivotal Memorandum of Understanding (MOU).
- The MOU paves the way for offering 17 million annual AI compute hours as services to a third party.
- A Supply Agreement by GenAI’s subsidiary, MAI Cloud, grants access to 350,000 AI compute hours using H100 GPUs over seven years.
- The Customer commits to paying approximately $70,000 monthly for Services, projecting a revenue of $6 million over the contract.
- MOU seeks to expand AI compute resources with 2,000 GPUs, potentially yielding 17 million additional compute hours annually.
- Parties are set to negotiate a definitive agreement (Proposed Agreement) within six months from MOU’s date.
- Proposed Agreement’s term is expected to span five years, extendable for two more, with execution within 30 days.
Main AI News:
In a strategic move set to reshape the AI landscape, Generative AI Solutions Corp., listed on the CSE as AICO and on the OTCQB as AICOF, has unveiled a groundbreaking Memorandum of Understanding (MOU). This visionary pact lays the groundwork for an impressive surge of AI computational resources, totaling approximately 17 million hours per annum, to be marketed as cutting-edge services to a third-party entity. The projected outcome? A monumental transaction poised to deliver a staggering 85 million AI compute hours across the upcoming quinquennium.
Originating from the corridors of GenAI, this news follows the Company’s revelatory press release on July 13, 2023. At that juncture, its wholly owned subsidiary, MAI Cloud Solutions Inc., triggered ripples across Silicon Valley by inking a pivotal Supply Agreement on July 12, 2023. The counterparty, a prominent entity headquartered in the tech haven, secured privileged access to an estimated 350,000 hours yearly of AI compute services, orchestrated through H100 graphics processing units. The contractual horizon stretches up to seven years, contingent upon conditions stipulated in the Supply Agreement.
In return for these avant-garde Services, the Customer has agreed to disburse an approximate monthly fee of $70,000, translating to a substantial revenue stream for MAI Cloud. Upon successful completion of the Supply Agreement’s tenure, the fiscal gratification is forecasted to scale the $6 million milestone, boasting a robust gross margin of approximately $3.5 million. Notably, the inaugural year is earmarked to yield around $850,000 in revenue, contributing significantly to a gross margin pegged at roughly $500,000.
The transactional gears set in motion by the Supply Agreement call for the Customer to remit 10% of the maiden year’s revenue within 14 days from the Equipment’s operational readiness. With this envisaged to occur in the upcoming 30-45 days, it sets the tone for a promising venture.
With resolute adherence to the Supply Agreement’s tenets, the Customer’s commitment remains unwavering as they undertake to cover Service costs during the initial 12-month period (“Initial Term”) from the Effective Date. Prerequisites include consistent adherence to the stipulations delineated in the Supply Agreement.
Building upon this momentum, GenAI’s recent development takes the form of a seminal MOU, consummated on August 24, 2023. The MOU heralds a collaborative endeavor between GenAI and the Customer, propelling negotiations for mutually beneficial terms. A central facet of this accord envisions an augmentation of GenAI’s AI compute offering via the provisioning of a formidable 2,000 GPUs. This transformative endeavor is anticipated to cascade into an additional 17 million hours of AI compute time per annum.
As the MOU charts the course, both GenAI and the Customer are primed to channel their energies into crafting a definitive agreement (the “Proposed Agreement”). Orchestrated through commercially sensible discussions, the Proposed Agreement is slated to materialize within the ensuing six months from the MOU’s date. Projected to span five years, with an optional extension of two more, the Proposed Agreement’s execution is earmarked to unfold within the next 30 days, painting an intriguing trajectory for GenAI’s dynamic growth.
Conclusion:
GenAI’s strategic initiatives, including the MOU and the Supply Agreement, position the Company as a major player in AI compute services. With a substantial influx of compute hours and revenue potential, GenAI is poised to tap into the growing demand for AI-powered solutions, further strengthening its market presence and setting a compelling precedent for innovation and collaboration.
