ESDS’s GPU lease averages US$250m a year, 4.5 times its revenue

01Who owns the GPUs, and who pays whom

The contract runs the opposite way to a typical data-centre deal. SharonAI Holdings, listed on Nasdaq, says that through a subsidiary it “agreed to provide high-performance managed GPU compute and cloud infrastructure services” to ESDS Software Solution “and certain of its subsidiaries”. A master services agreement and Service Order No. 1, dated 31 March, cover “approximately 8,200 NVIDIA B300 GPUs” and about 17.8 petabytes of storage at a data centre in Australia, for 60 months from the service start date, with an option for ESDS to extend by 24 months. The total contract value is about US$1.25bn. Fees are “payable monthly in advance”, and ESDS provides “letters of credit or bank guarantees in an aggregate amount of USD $140,000,000.”⁷ ESDS’s presentation counts 8,208 GPUs and describes Sharon AI as “an Australia-based neocloud AI compute service provider”.¹

The other end of the chain is SPOCHUB Solutions, an ESDS subsidiary, which “received an advance of ₹11,766.35 million from an overseas enterprise customer for a new GPUaaS project to provide exclusive access to a cloud infrastructure”.¹ Asked on the 25 September call whether that advance relates to the Sharon AI deal, ESDS answered “Yes”, and said it “will get amortized over a period of contract on monthly basis.” An analyst on the call described the customer as a European bank; ESDS replied that “we have not mentioned who is the client”. For international customers, ESDS said, it discusses demand with Nvidia, and service is provided only after Nvidia’s approval.⁵ ESDS has already earned from the project once: an analyst put SPOCHUB’s 2025–26 revenue at about ₹85 crore, and ESDS said it came from “technical design services” for the cluster “which they are building at Sharon AI factory”, a one-off.⁵

02A yearly bill 4.5 times the company's revenue

ESDS’s presentation converts the contract at “~₹118,312.50 million”, ₹11,831 crore.¹ Spread evenly over 60 months, that is ₹2,366 crore a year. ESDS’s consolidated revenue for the year to March 2026 was ₹472.2 crore, and for the four quarters to September 2026 ₹525.8 crore.⁴³ The US$140m of letters of credit or guarantees, about ₹1,325 crore, is about the size of ESDS’s entire equity, ₹1,294.5 crore on 30 September after its ₹720 crore share sale.³⁶

Not all of it is firm. Sharon AI’s filing says ESDS “may not terminate the Service Order for convenience during the first 36 months”, and that ending it early triggers termination payments whose size it does not give.⁷ Thirty-six months at the average rate is about US$750m. Sharon AI’s own scale shows why the guarantees exist: it reported revenue of US$2.2m for the six months to June 2026, and expects to spend about US$720m on equipment for “the $1.26 billion customer services arrangement with ESDS”.⁸ It intends to borrow 70–80% of such capex against the assets, and on 28 September it signed senior secured term loans of up to US$356m, at 7.25% to 9.95%, to buy servers “in support of a customer GPU compute contract”; the filing does not name the customer.⁹¹⁰

03What ESDS earns today, before the GPUs bill

ESDS sells three things: infrastructure as a service (cloud, colocation and GPUs, 50.5% of the September quarter’s revenue), managed services (31.2%) and software as a service (18.3%). Existing customers brought in 86.7%. It runs five data centres in India and listed 115 banks and financial institutions and 104 government clients on its community clouds on 30 June.²¹

The 48% rise is against a weak September quarter of 2025. Against April to June, revenue rose 3.5%. ESDS told the call that “Q4 is always a stronger quarter for us”, and that the 2025–26 rise in managed services was “primarily because of technical design service”, the Sharon AI cluster work; “Now, the shift will be towards IaaS revenue.”⁵ The margin has already moved: EBITDA was 41.8% of revenue against 52.0% a year earlier, as other expenses rose 182% to ₹50.8 crore. ESDS does not say what those expenses were.¹

04The spread: about US$3.48 an hour in, US$5–6 out

A GPU-hour is the unit this business sells. Divided across 8,208 GPUs and 60 months of hours, US$1.25bn comes to about US$3.48 per GPU-hour, storage and Sharon AI’s management included. On the call ESDS’s management said the industry is “billing upwards of $5 per GPU per hour”, “$5, $6 per hour. So, we are also going to bill our customer in that range only”, and that ESDS targets net profit margins of 15–20% on such deals: “We will not work for anything lesser than that.”⁵ The company also said the price at which ESDS leases from Sharon AI is about half the current market price.⁵

The bet behind the fixed price is on GPU rents. ESDS said on the call that B300s are “appreciating”, and that “next three to five years, it is anticipated that the rates will go up.”⁵ Public prices say rents are moving in both directions: in our Trend of 30 October, B200 hours had risen 21% in a month, while the median posted price of a B300 fell 16.3% over the 30 days to 30 October on the Price of Compute index.¹² For a reseller with fixed prices on both sides, a falling market matters most when the contract comes up for renewal or the customer leaves.

05What has to go right

First, the cluster has to go live. Sharon AI’s filing scheduled delivery for 16 September.⁷ On 25 September ESDS said the date “had got postponed by almost a month, 1.5”, and later in the call that ESDS was “expecting that to go live by November first week.”⁵ The 2 November presentation still says revenue “is expected to commence in the Q3FY27”, October to December.¹ As of 5 November we found no filing by either company saying the cluster is live.

Second, the customer has to stay and pay. One customer takes the whole cluster, and ESDS says it does not see concentration as a risk because an advance-paying customer who leaves can be replaced by “another customer ready to pay you a higher price”.⁵ That holds only while demand stays ahead of supply. Sharon AI names the risk from its side: it is “exposed to the credit quality of ESDS Software Solutions”.⁹

Third, the shareholders who priced all this. ESDS’s shares closed at ₹1,173.90 on 5 November on the NSE, 2.7 times the ₹429 issue price and 37% below the closing high of ₹1,853.15 on 24 September.¹¹ At that price the company is worth about ₹13,760 crore, a little more than the ₹11,831 crore contract. On 9 September, asked by the NSE to explain the price moves, ESDS said it was “not aware of any specific reason”.¹³