In-situ value
In-situ value is what GPU servers are worth installed and in use at their site: racked, powered and networked as part of an operating cluster.
The appraisal term is fair market value in continued use. It assumes the site and the business around it continue, but it does not include the value of the colocation or offtake contracts themselves.
How it works
Value in continued use. Appraisers define it as fair market value assuming the equipment stays installed and in use as part of an operating business, with the cost of installation and its contribution to the whole considered (appraisals).
It rests on the site, not only the servers: the same building, network fabric, power and offtaker. An NVL72 rack, which runs only where liquid cooling and over 120 kW per rack are already in place, is worth far more installed than pulled.
It drops away when the lender needs it: if the colocation contract or the offtake ends, the cluster has to be sold ex-situ. The difference between the two is the cost and discount of moving it (in-situ vs ex-situ value).
What lenders check
A going-concern exit comes closest to in-situ value. In the 2022 mining defaults, lenders whose borrower kept its power, site or contracts recovered 80 to 100 cents; those that took the machines back, or a quick cash payoff, recovered roughly 35 to 65 (what lenders recover).
Keeping the cluster in place is a structural choice made at funding: step-in rights in the colocation contract and a backup operator ready to run it.
Discuss a transaction
Send us the equipment list and the loan or lease you have in mind. We will come back with an indication and the questions we would need answered.
Prefer email? hello@amcompute.com
Questions
- What is the difference between in-situ and ex-situ GPU value?
- In-situ value is the servers installed and earning at their site; ex-situ value is what they fetch removed and sold on the secondary market, net of de-installation, shipping, testing and data sanitization. Ex-situ is lower, and it is the number a lender recovers when the site or contract is lost.