Duos Technologies sells GPU unit to Axe Compute for $42.9 million

Duos Technologies Group, Inc. (Nasdaq: DUOT) completed the sale of its GPU-as-a-Service entity to Axe Compute, Inc. (Nasdaq: AGPU) on September 30, 2026, a move that eliminates approximately $98.1 million in prospective equipment financing and redirects capital toward new colocation sites.

The transaction, announced via an 8-K filing, involves Axe Compute acquiring all outstanding equity interests in Duos Edge AI, GPUaaS, LLC. This special purpose subsidiary held the company's GPU compute cluster and associated equipment supply and financing positions. By divesting this unit, Duos shifts its business model to become a pure-play landlord for AI compute, focusing on owning and operating the site, power, and colocation infrastructure while customers manage the hardware.

Duos will receive $42.9 million in consideration for the sale, structured as evenly scheduled monthly payments over the next 60 months. The deal terminates a GPU equipment financing facility worth approximately $98.1 million, along with its associated covenants and debt service obligations. Duos Chief Financial Officer Chris DeAlmeida stated that this action preserves the company's debt capacity and covenant headroom for additional site development financing rather than equipment financing.

Service to the existing end customer at the Columbus, Georgia facility will continue without interruption under a revised five-year agreement. Under the new structure, Duos will lease the underlying GPU compute capacity from Axe Compute instead of owning and financing the equipment itself. The company expects this revised agreement to increase the revenue it recognizes from the customer over the life of the contract.

This repositioning follows significant commercial activity in 2026, including a 10 MW hyperscaler colocation agreement signed in July with a total contract value over $111 million. In August 2026, Duos also signed a five-year hosting service order with Axe Compute covering an aggregate 55 MW of U.S. sites, with a total contract value exceeding $500 million.

Duos Chief Executive Officer Doug Recker noted that the Columbus campus demonstrated that the company's modular architecture could deploy quickly and support frontier AI workloads at scale. He said the sale monetizes that success, allowing Duos to recycle capital into additional edge data center deployments. The company is now allocating its capital solely to build and run modular colocation sites of 10 to 30 MW capacity in various U.S. locations.

Duos maintains that its outlook for 2026 remains unchanged, with full-year revenue expected to exceed $50 million and positive adjusted EBITDA. The company continues to provide scalable power, cooling, security, and managed infrastructure services at the Columbus site, retaining the asset, power capacity, customer relationship, and contracted revenue tied to capacity rather than hardware cycles.