Company: BSAI
Filing Date: 2025-04-01
Form Type: 10-K
Source: 0001096906-25-000357
Chunk: 11

Company: BLUSKY AI INC.
Filing Date: 2025-04-01
Form: 10-K
Item: Item 1
Chunk 11
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 and high demand from cloud and AI companies impacting availability and pricing. BluSky AI’s dependence on a few major GPU manufacturers, such as NVIDIA and AMD, increases procurement risks, as delays or price hikes from these suppliers can directly affect operational costs and scalability.

We rely on the existing U.S. energy grid

Additionally, there are risks related to the U.S. energy grid. The growing demand for data centers, combined with aging energy infrastructure in some regions, poses a risk to BluSky AI's ability to secure reliable power for its facilities. Regulatory restrictions on energy consumption and sustainability requirements may also affect site selection and operational costs. Power-intensive AI workloads require stable energy supplies, and any potential grid instabilities could necessitate costly backup solutions, such as on-site renewables or energy storage systems. For BluSky AI's government contracts, any portion of its business tied to these agreements may be subject to renegotiation of profits or termination at the government’s discretion. Changes in federal or state regulations, budget reallocations, or shifts in policy could impact existing agreements, and government contracts often include termination clauses, meaning the government can end agreements without cause, potentially leading to financial losses. Additionally, the company must comply with evolving security and data protection requirements in government contracts, which may require additional investment in infrastructure and regulatory compliance measures.

We operate in a highly competitive and growing market

BluSky AI operates in a highly competitive data center market that is rapidly evolving in response to the growing demand for AI computing, particularly GPU on-demand services. The company faces competition from traditional hyperscale data center providers like AWS, Google, and Microsoft, as well as specialized modular data center firms. 

The demand for GPUs has skyrocketed with the intensifying AI workloads, and BluSky AI targets this expanding segment by offering flexible, high-density computing solutions. However, global semiconductor supply constraints and fierce competition from major GPU vendors such as NVIDIA and AMD present challenges. BluSky AI must navigate industry challenges such as long lead times for critical components, energy grid constraints, and potential disruptions in the semiconductor supply chain. Moreover, competitive pressures may force frequent innovations or strategic adjustments, especially as larger players ramp up their AI and GPU offerings.

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An occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations.

The occurrence of an uncontrollable event such as the COVID-19 pandemic may negatively affect our operations. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management