Lei Jianping reported on May 5
Singapore-based computing power operator SAITECH Limited completed a merger with SPAC (Special Purpose Acquisition Company) TradeUP Global Corporation (TUGCU) on April 29, 2022 and began trading on May 2, 2022.
The combined company is listed on the NASDAQ under the ticker symbol "SAI" and is valued at $188 million in the combined company' equity.
ARTHUR LEE, founder and CEO of SAI, said in an interview with Leidian that SAI strives to become a "Tesla" in the field of clean computing power and help reduce carbon emissions throughout society.
Arthur Lee said that he hopes that SAI will bring disruptive changes to the industry in the field of clean computing power in the future like Tesla in the field of automobiles, so that the underlying infrastructure of the industry will develop in a cleaner and more efficient direction.
Reduce the cost of computing power Provide comprehensive services for computing power, electricity and heat in independent areas
For the cryptocurrency mining industry, energy anxiety is always an inescapable topic.
Bitcoin mining consumes a huge amount of energy, even more than the electricity consumption of some countries, and many people see this high-carbon mining method as a threat to the environment.
SAI's innovation lies in sustainable mining, which horizontally integrates the three industries of computing power, heat and electricity, which can significantly reduce energy costs and improve energy efficiency. In the prospectus, SAI. TECH disclosed that its solutions have a heating efficiency of up to 90% and have successfully run large-scale heating pilots, which can provide stable heating for large-scale heating projects such as agricultural greenhouses, greenhouse planting, and residential buildings.
Through exclusive liquid cooling and waste heat recovery technologies, SAI recycles the waste heat of the chip, reduces the operating costs of computing power for high-performance computing, and provides clean thermal services for potential customers, helping the hashrate industry to transform to clean energy.
SAI's development in the field of clean computing power is divided into three stages. In phase 1.0 of 2019, SAI launched the core technology solution - SAIHUB, which proved the feasibility of the technical solution by providing computing thermal services to single-family households; in phase 2.0 of 2021, SAIHUB successfully achieved large-scale heating for the entire community or multiple greenhouses, and the application scenarios expanded from residential to more complex environments such as commercial and agricultural;
From 2022 onwards, SAIHUB will officially enter the 3.0 stage, through the integration of heat, electricity, algorithms and chips four core links, comprehensively reduce the cost of computing power to reach the singularity, provide comprehensive services for computing power and heat for independent areas, and promote the clean and sustainable development of the computing power industry.
Of course, compared with Tesla, SAI is smaller, and there is still a long way to go to truly achieve this goal.
Catch the last train before the SPAC merger listing window narrows
From 2021 onwards, cryptocurrency companies have become a boom through SPAC merger listings. Over the past year, nearly 10 cryptocurrency companies have been listed through SPAC, such as Core Scientific, Cipher Mining, Bakkt Holdings, and others. Other mining companies such as BitFuFu and Bitdeer also plan to list U.S. stocks through SPAC in 2022.
The SPAC market has now calmed down after its heyday in 2019 and 2020. The TIME when SAI got the U.S. stock market to take effect coincided with the last train before the SPAC merger listing window was narrowed.
According to Arthur Lee, the entire merger and listing process has experienced many twists and turns, the whole team seems to have participated in a series of challenges together, and everyone's psychological endurance and other aspects are on the verge of extreme pressure. Fortunately, SAI officially obtained approval before the new SPAC regulations were introduced, and was confirmed to be listed on May 2, 2022 (Eastern Time).
Here is a transcript of the conversation:
Q: From 2020 to 2021, there are many companies that will be listed through the SPAC model, how did you choose TradeUP?
Arthur Lee: The average person might think that SPAC is simpler than a traditional IPO, but we have encountered a lot of challenges in the whole process because of a lot of external environmental influences.
The SPAC boom in the US stock market began from 2019 to 2020, peaking in January-February 2021, and the amount of SPAC raised in the market for several consecutive months has exceeded the amount of IPO fundraising, and many companies have also listed through the SPAC model.
For the industry in which SAI.TECH is located, internationalization is the trend of the times. In this context, we saw the heat of the market and judged that the time to go public was ripe, so we began to actively look for partners and seek opportunities to go public through SPAC. TradeUP was the most recognized SPAC partner for cryptocurrencies, the hashrate industry, and SAI companies and teams at the time, and the strong consensus mechanism allowed us to quickly hold hands.
Catch the last train before the SPAC merger listing window narrows
Q: You just caught the last train before the implementation of the new SPAC regulations, can you tell us some of the stories behind your listing?
Arthur Lee: From March to April 2021, the United States issued new SPAC rules, and TradeUP was the first SPAC to pass an IPO after the new rules.
SAI. The merger of TECH and TradeUP has experienced many turmoil in the middle, including the listing of Didi and the suspension of the listing of Chinese stocks in the United States; the policy of withdrawing bitcoin hashrate issued in May 2021 has also had a great impact on the industry.
Fortunately, SAI.TECH carried out a series of adjustment measures in a timely manner, including operating at sea, turning to R&D and supply chain support in China, and moving its headquarters to Singapore. In addition, we also lifted the VIE structure in a timely manner, and made arrangements in advance in terms of PCAOB audit to ensure that the manuscript was audited, which saved a lot of time for the submission of listing materials later.
In the later stages of preparation for the listing, the external environment continued to change dramatically, including rising global energy prices, the aggravation of the epidemic, the Federal Reserve's interest rate hikes, and even the geopolitical upheaval of the war, fortunately, we have overcome various challenges again and again.
At a time when we anticipate that we will receive the SEC listing effective notice, we have learned through Tiger International that on March 30, the SEC may issue a new draft for discussion of the new SPAC regulations. This caused us a lot of concern at the time, SAI. If the merger transaction between TECH and TradeUP cannot take effect before the new SPAC regulations, it means that the two parties will spend more time in the process of listing in the future, and the uncertainty of time will pose a challenge to the company and affect the business, because the normal development of the SAI.TECH business needs to be supported by stable cash flow, and once it is impossible to go public as scheduled, many plans will be disrupted.
So, the week of March 30th, the whole team basically stayed up late for 7 or 8 days in a row, 24 hours a day, preparing to find a way to submit materials or respond to SEC responses. In just a dozen days, we achieved an output efficiency equivalent to two rounds of SEC responses. Finally, before the new SPAC regulations, we got the approval of the merger to take effect. Until then, everyone, whether it was a lawyer or all the people involved, thought it was an impossible task.
However, because our entire team, the lawyers on both sides and the participants from all walks of life have reached their full potential, almost all the problems encountered can be overcome within 24 hours to solve the time difference, and then miraculously get the effective approval, and finally set for delivery on April 9, and officially change the code to "SAI" on May 2.
The whole process is like a series of passes, everyone's psychological endurance, all aspects of the pressure is very large.
Thanks to Tiger International and Zhencheng Investment for their help
Question: The initiator of This TradeUP is Tiger International and Zhencheng Investment. How do you see each other's cooperation?
Arthur Lee: Zhencheng Investment and Tiger Brokers have been very helpful in this merger.
Now, many SPAC merger projects are facing cancellation, and many even give up halfway through due to technical details such as valuation. Because the uncertainty is too high, the participants generally have a mentality of "preferring not to do it rather than take such a big risk". Even after completing many of the merged projects, the redemption rate is as high as 80% or even 90%. The merger between SAI.TECH and TradeUp was not only successfully completed, but also the redemption rate was less than 50%, which fully proved the recognition of SAI.TECH by the market and investors in such a market environment.
In this process, whether it is Zhencheng or Tiger, in the legal team, audit, all the submission process cooperation, and even to some of the later compliance links, they have been very trusting and supportive of us, and our whole team is really grateful.
Idle heat energy can be used in industry and agriculture
Question: SAI.TECH mainly do is to clean the computing power, and reapply the heat generated by the computing power to multiple life scenarios, can your application in this area be specifically popularized?
Arthur Lee: SAI.TECH is positioned as a company that provides clean computing power services, and we believe that the core need for the future development of the whole world is computing power.
Computing power is a more efficient way to use energy, and we believe that more things will be replaced by digitalization in the future, such as the transmission of information, the transmission of value, etc., and the digital process relies almost entirely on computing power. The computing power industry will grow rapidly in the future, and we also hope to provide sustainable energy or sustainable clean computing power in this industry, so that the industry can develop cleaner, faster and more in line with the concept of ESG.
At present, the core cost of the computing power industry is four, the first is electricity, which consumes a lot of electricity to run the data center. The second is heat, the operation of the equipment will produce a lot of heat, to consider the problem of heat dissipation. The third is the algorithm. Algorithms face constant optimization iterations to make them more efficient. The fourth and most core is the chip. Among them, electricity and chips are the core costs, accounting for 70%-80% of the cost of the entire industry. Heat dissipation is the key to controlling the cost of electricity, such as traditional data centers, more than 40% of the power consumption is actually taken to dissipate heat.
In this state, we are constantly thinking about how we can further reduce the cost of hash rates, so that everyone can use cleaner, sustainable and more cost-effective hashing services. The conclusion is that we need to reduce costs through these four dimensions.
The cost of electricity is hard to shake because the cost of generating electricity is certain, so it's hard to lower it further. In the hot area, we feel that there is a very large space. In the past, the idea of the whole market was to dissipate heat and dissipate this excess heat, and we chose to subvert the convention. Instead of consuming excess power to dissipate heat, why not collect it and use it? In other places, there are many people who need a lot of heat, such as industrial, agricultural greenhouses, and even daily heating and hot water, and these heating needs need to be met by consuming additional energy.
If we collect the heat generated by the computing power industry to other industries with heat demand, in essence, it will reduce the total energy consumption of the whole society, and the things that used to consume two kilowatts of electricity are now solved by one degree of electricity.
SAI. TECH through its own core technology solution SAIHUB, is a similar way to the computing center, the server and the calculation process of the chip generated heat are collected, to provide heat demand side, such as agricultural greenhouses, such as life heating, including hot water, and even some areas of industry, to achieve a closed loop of reuse.
In this way, the idle energy that is itself waste heat is efficiently reused, which not only reduces energy costs, but also reduces total carbon emissions, and actually reduces the total energy consumption of the whole society.
To become a "Tesla" in the field of clean computing power
Question: The cryptocurrency industry also needs a lot of computing power provided by companies like SAI, what kind of value can you provide in the middle?
Arthur Lee: We hope that we will eventually become an integrated energy service provider, or computing energy operator, in the entire computing power industry that specializes in providing computing power based on ASIC chips or GPU chips.
SAI. TECH's terminal computing power is similar to the cloud computing power service provided by Alibaba Cloud or Amazon Cloud, and we also provide cloud computing power, except that our cloud computing power is other computing types, which are high-performance computing computing services based on ASIC chips or GPU chips.
The traditional Bitcoin mining industry consumes a lot of energy while generating a lot of heat, and the market is also very sensitive to the price and energy cost of Bitcoin. Therefore, we regard it as a target industry for priority clean computing power services, and it is also an industry that we give priority to providing computing power solutions.
We hope to bring cleaner, more efficient and low-cost Bitcoin computing power services to this industry, and on this basis, expand the type of computing power to other supply directions, such as becoming a comprehensive computing operator of THIS type of computing power such as THE AI computing power of GPU chips.
Essentially, we think of hash rate as an energy industry, and we want to be a provider of clean hash power in this energy industry. For example, the automotive industry has fuel vehicles, there are electric vehicles, but there is also a unique existence like Tesla. We also hope that in the future, the computing industry will have a traditional computing industry, a high-performance computing industry, and a unique role like our SAI.
We hope to vigorously promote and develop our innovative clean and high-performance hashing solutions in the future, the larger our scale means that the cleaner the computing power of the industry, the higher the efficiency, and the less energy is consumed.
To become the most cost-effective and lowest cost computing power on the market
Question: During this merger process, the funds obtained, SAI. What will TECH be used for?
Arthur Lee: We spend money on the development of our core business and core technologies to continuously iterate on our products.
We think we're at a stage that's a bit similar to the eve of Tesla's Model 3 mass production. Tesla started with the Roadster Concept Sports car, just like the engineering prototype we launched at the beginning of 2019, proving that I can use the heat of the server to heat it. The Model S period is equivalent to our SAIHUB 2.0 phase, doing small large-scale pilots, and we have also done the business of heating the entire district in China before.
The phase to Model 3 is the phase of our SAIHUB 3.0, and we hope to reach the singularity of the industry. Like the Model 3's singularity of electric vehicles, when the supply chain and battery technology reached the singularity, the production cost was even cheaper than that of a fuel car, and it was cleaner.
The same is true for us, we want to reintegrate chips, heat, electricity and computing power in the SAIHUB 3.0 phase. At SAIHUB 3.0, our goal is to provide the highest value-for-money and cleanest hash rate on the market.
So, we'll use our money to further reduce the cost of computing — the cost of electricity, the cost of cooling, the cost of algorithms, the cost of chips — and then we'll reach the singularity of a clean computing solution and achieve our goals.
Question: SAI.TECH a lot of business is mainly overseas, what are the business plans for this year?
Arthur Lee: All of our business is overseas, and we moved our headquarters to Singapore last year, and 2022 is a key time point for us, on the one hand, we have completed the listing and obtained the ticket to the international market, on the other hand, with the landing of the core business, SAI will be further integrated into the international capital market in the future. We hope to cooperate with more international investors to jointly develop global business and achieve a win-win situation.
The second is at the operational level, where we hope to implement pilot projects in more countries. At the same time, the scene application of the project will be more diversified, providing waste heat reuse projects with computing power for industry, commerce and even greenhouses, residential areas, etc., and also providing cleaner, high-performance and more cost-effective computing power services for the entire market.
Bitcoin inventor Satoshi Nakamoto replied on a bitcointalk.org forum 12 years ago
In fact, the inventor of Bitcoin, Satoshi Nakamoto, discussed the energy consumption of Bitcoin mining at a Bitcoin forum event held on August 10, 2010, and he believed that Bitcoin mining would eventually be carried out in those places with the lowest energy costs. The place with the lowest energy cost should be those cold areas, because the heat generated by the calculation can provide heating services to the cold areas, so in this case, the cost of electricity can be understood as free, because it also needs to consume so much electricity to heat up with heat, so at this time Bitcoin can be understood as zero cost. In such a situation, it is the least costly state.
SAI. TECH said that it fulfilled Satoshi's prophecy and replied to Satoshi Nakamoto
As a clean Bitcoin company focused on the reuse of Bitcoin hash power waste heat, if we can achieve such a goal, I think this will become a turning point for the entire industry, whether it is the development of the computing industry or the direction of Bitcoin hashrate, it will be redefined. The heat of hashrate should be reused to make computing power cleaner and less costly, which is what I personally expect from SAI to be successfully listed on NASDAQ – we can promote this concept and solution faster and drive the transformation of the computing power industry to a cleaner direction.
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Lei Di was founded by veteran media person Lei Jianping, if reprinted, please indicate the source.