VANCOUVER, BC, July 13, 2023 /CNW/ - Generative AI Solutions Corp. ("GenAI" or the "Company") (CSE: AICO) (OTC: AICOF) is pleased to announce that its wholly owned subsidiary, MAI Cloud Solutions Inc. ("MAI Cloud"), has entered into a purchase agreement dated July 12, 2023 (the "Purchase Agreement") with an arm's length third party customer headquartered in Silicon Valley (the "Customer"), pursuant to which, among other things, MAI Cloud has agreed to provide the Customer with access to approximately 350,000 hours per year of AI compute services (the "Services") using H100 graphics processing units (the "Equipment") for a period of up to seven years subject to the terms and conditions of the Purchase Agreement.
In consideration for Services, the Customer has agreed to pay MAI Cloud a fee of approximately $70,000 per month ("Revenue"). If the terms of the Purchase Agreement are completed for the full term, it is anticipated that MAI Cloud will receive an aggregate of approximately $6 million in Revenue at a gross margin of approximately $3.5 million. Approximately $850,000 in Revenue will be paid in the first 12 months of the term at a gross margin of approximately $500,000. Pursuant to the terms and conditions of the Purchase Agreement, the Customer has agreed to pay 10% of the first year's Revenue within 14 days of the Equipment being made available for use by the Customer, which is anticipated to be within the next 60 days. In accordance with the terms and conditions of the Purchase Agreement, the Customer is obligated to pay for the Services for the first 12 months (the "Initial Term") following the effective date of the Purchase Agreement (the "Effective Date"), provided that the Equipment and Services continue to meet the requirements specified in the Purchase Agreement. The Customer retains the right to extend the Initial Term for a period of up to an additional 72 months. The Purchase Agreement may be terminated after the Initial Term by the Customer upon 30 days' written notice to MAI Cloud, and by MAI Cloud upon 60 days' written notice to the Customer, or following the first 36 months after the Effective Date, by MAI Cloud upon 30 days' written notice to the Customer in the event that Equipment is not available for use for the purposes set out in the Purchase Agreement due to hardware or software breakdown.
Ryan Selby, CEO of the Company, commented "This Purchase Agreement marks a significant milestone for GenAI and reflects our commitment to generating revenue and delivering value for our shareholders. We will continue to source and develop customer relationships to further our MAI Cloud platform."
On Behalf of the Board,
Ryan Selby
CEO, Director, and Chairman of the Board
Generative AI Solutions Corp.
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