BluSky AI Inc., formerly known as Inception Mining Inc., reported a significant financial downturn in its latest 10-K filing for the fiscal year ending December 31, 2024. The company recorded a net loss of $949,782, a stark contrast to the net income of $12,755,659 reported in the previous year. This decline of $13,705,441 was attributed to various factors, including increased interest expenses, changes in derivative liabilities, and a decrease in gains from extinguished debt. Operating expenses also decreased to $521,105 from $1,066,618, primarily due to reduced consulting fees.
The company underwent a strategic transformation in March 2025, shifting its focus from mining operations to providing modular data center solutions tailored for the artificial intelligence (AI) sector. This rebranding reflects BluSky AI's commitment to addressing the growing demand for AI compute infrastructure. The divestiture of its Clavo Rico mine in January 2023 marked a pivotal change, allowing the company to concentrate on its new business model. Despite this shift, BluSky AI has faced challenges in collecting payments from Mother Lode Mining, the buyer of its former mining operations, leading to ongoing litigation.
In terms of operational metrics, BluSky AI has not yet established a significant employee base, currently relying on independent contractors and consultants. The company plans to expand its workforce as it develops its AI operations. BluSky AI aims to deploy modular data centers across various U.S. jurisdictions, leveraging existing power infrastructure to facilitate rapid deployment and scalability. The company is targeting initial sites with power capacities ranging from 5 MW to 60 MW, which will allow it to meet the increasing demand for AI services.
Looking ahead, BluSky AI's management acknowledges the need for additional capital to support its expansion plans. The company reported a working capital deficit of $3,346,850 as of December 31, 2024, with no current assets. The management is actively seeking financing options to sustain operations and implement its business strategy. However, the company faces substantial risks, including reliance on third-party suppliers, competition in the data center market, and potential regulatory changes that could impact its operations. The outlook remains uncertain, with management emphasizing the importance of securing funding to continue its transition into the AI compute infrastructure sector.