2 days ago
- Business
- Los Angeles Times
Pasadena Startup Compute Labs Launches Pilot Program to Tokenize AI Infrastructure
As GPU hardware is overtaxed worldwide, a novel solution is being created utilizing digital currency exchanges
A Pasadena startup is looking to capitalize on the AI boom by investing in the infrastructure that powers data centers – the GPUs, or graphic processing units, that make up the data centers supporting large language models.
'Our goal is to democratize access to the infrastructure layer,' said Albert Zhang, chief executive of Compute Labs. 'There is a significant demand over supply situation. Many GPUs are running at 100% utilization. The yield for these assets are really high at the moment.'
That moment could have long tail winds as companies such as OpenAI, Google and Meta plan to invest billions of dollars in data center development. For example, Meta reportedly was in discussions with private credit investors including Apollo Global Management KKR, Brookfield, Carlyle and PIMCO to raise $26 billion in debt to finance data centers.
Compute Labs raised $3 million in a pre-seed round last year led by Protocol Labs. The company purchases equipment on behalf of accredited investors and then leases it to data centers which pay on a revenue sharing model. The assets are sold to investors through a digital token that is collateralized against the physical asset. These tokens pay regular distributions and can be traded on digital currency exchanges. In this model, the data centers are able to offload a capital expenditure and turn it into a regular operating expense. Otherwise, operators would typically rely on private lenders.
It launched its first data center investment in June with $1 million that has all been invested and distributed as tokenized GPUs. It plans to raise $10 million following the pilot deal and has over $100 million in GPUs in its pipeline ready to match with investors.
Zhang's background includes working at a Y Combinator company and at a financial technology company. He pivoted to AI in 2022 when OpenAI was released. A discussion with an angel investor from the semiconductor industry told Zhang that if he could have started over, he would have invested in the infrastructure of the business. Companies had started selling assets such as U.S. Treasuries as tokenized digital assets. Plus, Jensen Huang hosted a GPU conference in March 2024 where he said that the computer will be the currency of the future.
'After that, we closed within two weeks,' said Zhang. 'It's like syndicating real estate deals, but the asset class is new. We have a lot of challenges as a super young company without a track record, and investors don't realize that the GPU can yield at such a high rate.'
There are additional regulatory challenges, but some of those were addressed with the recently passed Genius Act, which includes a clearer framework around stable coin and real-world assets. Compute Labs is also looking into a SPAC merger, which would make it a public company and give it broader access to capital.
