Jericho and Smartkem Plan All-Stock Merger to Boost AI Infrastructure

In a groundbreaking development, Jericho Energy Ventures Inc. has entered into a strategic agreement with Smartkem Inc., a pioneer in organic semiconductor technology. This proposed all-stock business combination, announced in a recent release, sets the stage for creating a Nasdaq-listed AI infrastructure company.

The deal, if finalized, aims to merge the capabilities of Jericho's energy innovations with Smartkem’s semiconductor technology. This fusion is expected to enhance AI data centers, addressing the growing demand for AI processing power. Jericho, already strategically positioned in the AI and energy sectors, plans to leverage Smartkem's technology to boost energy-efficient AI data center functionalities.

The integration will focus on aspects such as energy-efficient AI data centers, advanced AI chip packaging, and innovative data transmission techniques. "AI compute growth is driving unprecedented demand for U.S. power and infrastructure," commented Jericho’s CEO, Brian Williamson. He further highlighted the potential of combining Jericho's scalable energy solutions with Smartkem's technological advancements.

Smartkem’s CEO, Ian Jenks, added that this merger puts Smartkem at the forefront of a significant technological expansion, potentially bringing their patented materials into next-gen AI infrastructures. The strategic advisor for Smartkem, Anthony Amato, emphasized the creation of a unified U.S. platform for AI data centers, pairing energy resilience with advanced semiconductors.

Details of the Proposed Merger

The Letter of Intent outlines the proposed transaction as an all-stock business combination, potentially through a share exchange or merger. Smartkem would remain the surviving entity, maintaining its Nasdaq listing. Post-merger, Jericho shareholders are expected to hold 65% of the combined entity, with Smartkem shareholders holding 35%.

Brian Williamson is slated to become the CEO of the newly formed company. The board of directors will predominantly consist of Jericho appointees, adhering to Nasdaq and SEC regulations. The transaction, however, requires additional capital, stockholder approvals, and satisfactory due diligence.

A 60-day exclusivity period has been agreed upon to finalize terms, with conditions allowing either party to terminate under specific circumstances. The arrangement aims to ensure key technology assets are scaled under U.S. ownership, targeting global AI infrastructure partners.

About Smartkem

Smartkem is at the forefront of electronics innovation with its proprietary TRUFLEX® semiconductor polymers, facilitating low-cost, high-performance displays. These materials are essential in advanced display technologies and AI chip packaging. Smartkem operates its R&D from Manchester, U.K., with additional facilities near its partner, ITRI, in Taiwan.

Jericho's Data Center Drive

Jericho has been actively expanding its data center initiative, leveraging its vast oil and gas holdings in Oklahoma. The company aims to transform these assets into AI computing hubs using on-site natural resources. In collaboration with M2 Development Solutions LLC, Jericho is extending its reach into Ohio and Nevada, tapping into large-scale sites with diverse energy options.

Williamson noted that the partnership with M2 accelerates Jericho's ability to deliver scalable, energy-efficient infrastructures tailored for AI workloads. This expansion reflects the broader trend of increasing electricity demand in the U.S., driven by advancements in AI technology and other industries.

Rising Electricity Demand and Future Outlook

The American electricity demand is experiencing a sharp rise, with industrial and technological advancements as key contributors. A report by ICF International projects a 25% increase in demand by 2030 and a 78% surge by 2050. This rising demand could significantly affect electricity reliability and cost, with possible rate increases between 15% and 40% by 2030.

The global data center market, as noted by Grand View Research, is also set to expand, fueled by digital transformation and emerging technologies like AI and IoT. This growth underscores the strategic significance of Jericho and Smartkem's proposed merger in meeting future infrastructure demands.