'My comeback story:' Reformed felon buys Niagara Falls property for AI data center (2024)

Five years ago, Mike Bagley of Alexandria, Va., was sentenced to four years in a federal prison camp after being convicted of money laundering in an FBI sting operation.

Two years later, he was released from prison and founded a bottled water company, Jellyfish Water, based on a Gospel quote from Jesus: “Whoever drinks the water I give them will never thirst.”

Now Bagley has founded another company, 9 Lives Digital Group, that he says will assist the revival of Niagara Falls by turning a former industrial site in the city into an artificial intelligence data center and logistics hub.

“This is a comeback story for me, and part of a comeback story for Niagara Falls,” Bagley said.

9 Lives Digital Group purchased the former Globe Metallurgical property at 3807 Highland Ave., for $3 million on July 3 from developer Jerome P. Williams, who purchased it from Globe for $1.5 million in 2021.

Globe Metallurgical shut down the former silicon plant in 2018, eliminating 100 local jobs.

Bagley said he used private financing to buy the property but said it is too soon to name the “tech developers” investing in the venture.

Bagley said 9 Lives wants to be part of New York’s bid to be a leader in AI, a goal that Gov. Kathy Hochul backed with $425 million in public and private funding for the creation of the new Empire AI consortium based at the University at Buffalo.

He said he has been working for two years to acquire what he called the perfect location for an AI supercomputing center because it has so much of the energy and water needed to operate the advanced computer network and infrastructure needed for an AI data center.

During that time, most of the old industrial structures have been cleared from the 22-acre property, “leaving us a blank canvas” to build the AI data center over 18 to 24 months, Bagley said. Warehouse and office space on the other end of the site can be leased out for storage and logistics.

Bagley said he has the support of Niagara Falls area officials who want to see the property put to use to contribute to economic growth of the city, which has gotten the short end of the Buffalo Niagara region’s ongoing resurgence.

Craig Turner, chair of the Niagara USA Chamber of Commerce and owner of the Momentum business growth agency that put out a news release about the 9 Lives project this week, did not mention Bagley’s background in touting the plan.

Kory Schuler, executive director of the chamber, said in the release an AI data center at the Highland Avenue site “will breathe new life into industrial land” and advance AI development in the region. But Schuler said he did not know many details about 9 Lives or the project, which he said will be privately funded “so they won’t need to go the state or county for financing.”

Bagley said the site had been a brownfield that was cleaned up by the developer prior to the sale and it is in the industrial zone the Niagara Falls City Council approved for high energy use operations like AI data crunching, bitcoin mining and cannabis cultivation in 2022.

Bagley said he intends to be transparent about his past transgressions, which he called “some left turns and right turns.” After graduating from the University of Alabama with a public relations degree, he said, he worked for U.S. Senate staffers in Washington, D.C., then built his own marketing firm that spawned a private intelligence firm, Jellyfish Partners.

In 2019, the FBI targeted the firm as claiming to operate “primarily in Mexico” and set up Bagley in a money laundering sting. Bagley took the bait, met with agents he thought represented Mexican drug cartels and laundered a total of $250,000 he thought were proceeds from drug sales through a bank account in his company’s name, according to the U.S. Justice Department.

Bagley was convicted of money laundering and sentenced to four years in a federal prison camp and was released after two years of good behavior.

Bagley founded Jellyfish Water in 2021 to provide bottled water with inspirational messaging mostly to the horse racing industry, a sport he enjoyed watching in prison, he said. At the same time, he realized that the AI industry was taking off and could be a great investment for the future.

He identified Niagara Falls as a location that offers electricity, hydropower and water for cooling advanced supercomputing equipment as well as affordable property close to the U.S.-Canada border in a city that’s desperately seeking revitalization. He said the former Globe property has a 100-megawatt power station on site that adds to its capacity for supporting an AI supercomputing center.

Bagley said Hochul’s creation of Empire AI and her vision to make New York a base for an AI industry that harnesses artificial intelligence for “the public good” and the designation of upstate New York as a federal tech hub have further convinced him that “things are happening in New York and Western New York, and there are many players who want to be part of the tech ecosystem here.”

Bagley, who has not revealed how his venture will be funded, said he anticipates spending about $100 million and creating 500 construction jobs to build the AI data and logistics center in the next two years, “with 200 jobs to remain once it’s built.”

9 Lives Digital Group’s “international headquarters” is listed as Algiers, North Africa.

He said he plans to collaborate with “private sector partners in the AI development business” that want to tap into “big tech” resources but are far smaller than the tech giants currently ruling AI. He said he hopes bringing an AI company to Niagara Falls will attract more tech companies to the city that will generate smaller businesses like cafés and restaurants in the area.

“Our vision is to be the EKG that helps bring this area back to life,” he said.