Alset AI acquires $1.3M Chaco Minerals debenture to offset debt and gain lithium exposure
What's the deal? Alset AI Ventures, an AI venture company listed on the TSXV, has acquired an unsecured convertible debenture issued by Chaco Minerals worth roughly $1.3M. The deal, announced on May 6, converts an intercompany receivable from portfolio company Lyken.AIDealroom has a profile for this one. Try Dealroom → into an investment asset tied to lithium exploration.
Under the assignment agreement, Lyken.AI transferred the debenture — originally issued in December 2024 with a 3% annual interest rate and a December 2026 maturity — to Alset AI. In return, Lyken.AI's debt to Alset was reduced from $1.64M to roughly $342,000.
Alset can convert the principal plus accrued interest into Chaco units at $0.10 per unit, with each unit consisting of one common share and one warrant.
Why now? Alset AI frames the move as part of a broader thesis: gaining exposure to critical materials needed for AI infrastructure buildout. The company points to surging energy demand from data centres — the International Energy Agency reported that AI-focused data centre electricity consumption jumped 50% in 2025 — and the growing role of lithium-ion batteries in backup power and energy storage systems that keep those facilities running.
Google disclosed in 2025 that it had deployed more than 100 million lithium-ion cells across its global data centre fleet, underscoring how central the material has become to the AI supply chain.
What could go wrong? Chaco Minerals is an early-stage lithium exploration company focused on Paraguay's Chaco Basin — a region it describes as under-explored. The debenture is unsecured, meaning Alset has no collateral backing the investment if Chaco fails to perform. Converting an intercompany receivable into an exploration-stage investment swaps one form of risk for another.
The debenture matures in December 2026, giving Alset a narrow window to either convert or collect. If lithium prices weaken or Chaco's exploration yields little, the asset could prove less valuable than the receivable it replaced.
The signal: Alset AI's manoeuvre underscores how micro-cap AI venture firms are stretching beyond software and compute to stake claims in the physical supply chain. Lyken.AI, classified by Dealroom as an early-growth boutique AI infrastructure provider, effectively swapped a debt obligation for a cleaner balance sheet — a move that may ease its path to future financing. The broader bet, that lithium demand will be pulled higher by AI-driven energy consumption, is a thesis gaining traction, but layering exploration-stage mineral exposure onto a small AI venture portfolio adds concentration risk that investors will need to price in.
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