SOS Limited announced a new Tier III modular data‑center project at its Longfellow Ranch site in Fort Stockton, Texas. The project marks a strategic shift from the company’s core cryptocurrency‑mining operations toward a broader digital‑infrastructure portfolio, positioning it to serve cloud, AI, and enterprise customers in the rapidly expanding AI‑compute market.
The modular design is expected to cut the total project cost by nearly 50%, reducing the investment for a 100 MW data‑center from roughly $1.2 billion to about $500 million. The first phase will deploy a 10 MW modular cluster, with plans to scale to 100 MW within 18 months, contingent on market demand and customer onboarding. Longfellow Ranch is already a hub for next‑generation compute, hosting a 2 GW AI data‑center project from CoreWeave and Poolside, which underscores the strategic value of the location.
SOS Limited’s financials highlight the urgency of this pivot. The company’s gross margin sits at 1.27%, with operating and net margins at –8.25% and –6.49% respectively, reflecting significant cash burn and margin compression. Revenue grew 48.1% year‑over‑year in the first half of 2025, but the trailing‑12‑month revenue trend shows a 48.81% decline as of Q2 2024. The company’s prior data‑center venture launched in March 2023 with a 10 MW cluster, planned to expand to 20 MW in Phase 1 and 50 MW in Phase 2, demonstrating experience in scaling data‑center capacity.
Following the announcement, investors reacted with a 17.29% decline in the company’s market value, underscoring concerns about the large capital outlay and the company’s ongoing margin challenges. The market’s reaction reflects the perceived risk that the new data‑center investment may not immediately offset the company’s cash burn and could strain liquidity if customer onboarding is slower than anticipated.
CEO Yandai Wang emphasized the advantages of the modular approach, stating, “The modular design allows us to deploy infrastructure quickly and cost‑effectively, giving us a competitive edge in the AI‑compute market. By leveraging our existing commodity‑trading and mining expertise, we can accelerate the rollout and achieve economies of scale.” He added that the Longfellow Ranch site offers a strategic advantage due to its proximity to other AI data‑center projects and robust power infrastructure.
The project’s success will hinge on the company’s ability to secure high‑margin AI and cloud contracts while managing the upfront capital expense. If the modular data‑center delivers on its cost‑saving promise, it could transform SOS Limited’s profitability profile, turning a historically low‑margin mining business into a scalable, high‑margin digital‑infrastructure provider. However, the company must navigate the risk of slower customer acquisition and continued cash burn, which could limit its capacity to fund further expansion without additional financing.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.