The cryptocurrency industry transforms into AI cloud, and miners have become the new gold owners of NVIDIA.
According to reports, Tether has purchased 10,000 units of the NVIDIA H100 GPU for $420 million and will also receive a 20% stake in the cryptocurrency mining company Northern Data. Northern Data, in turn, has acquired a 70% stake in a shell company associated with Tether and plans to lease the GPUs to AI startups.
After several major failures, the cryptocurrency community has turned its attention to the thriving field of AI.
According to a report by Forbes yesterday, Tether, a stablecoin worth $86.5 billion, has purchased 10,000 NVIDIA H100 GPUs for $420 million and will also receive a 20% stake in the cryptocurrency mining company Northern Data.
Northern Data has acquired a 70% stake in a shell company associated with Tether and plans to rent out the GPUs to AI startups, entering the GPU cloud services sector. The report states that this indicates that Bitcoin miners are taking advantage of the booming AI industry to explore new sources of revenue.
It is worth noting that Northern Data is not the first mining company in the cryptocurrency community to explore revenue streams in the AI boom. In August of this year, NVIDIA CEO Jensen Huang mentioned a startup called Coreweave during an earnings conference call.
Coreweave, which previously focused on leasing GPUs to cryptocurrency miners, provides support for InflectionAI and Microsoft's AI projects. After completing a Series B funding round of $42.1 million earlier this year, Coreweave raised $230 million in debt in August.
Huang said:
You will see a large number of new GPU professional cloud service providers.
In addition, other mining companies such as Hive, Crusoe, and Hut 8 have also started renting out idle GPUs to AI startups in need of chips after conducting energy-saving maintenance in September 2022.
Aroosh Thillainathan, CEO of Northern Data, said that this transaction could make the company the largest cloud GPU operator in Europe, surpassing cloud computing giants like Amazon, Microsoft Azure, and Oracle.
Thillainathan told Forbes, "Since GPUs are in short supply for every AI company, getting the top 2% of the hottest GPUs is a great opportunity." According to a previous article by Wall Street CN, NVIDIA is expected to ship a total of 550,000 H100 graphics cards this year.
It is reported that the structure of this transaction is very complex. Tether purchased a 20% stake in Northern Data through an Irish shell company called Damoon, and Northern Data obtained a 70% stake in the shell company through a stock exchange. Northern Data has the option to acquire the remaining shares of the shell company, but the total price is still unclear. The transaction has not been completed yet. Northern Data's performance has been questioned by regulatory authorities. The financial performance of Northern Data in 2020 and 2021 did not meet the guidance. Its performance for 2022 has not been disclosed yet, but it is expected that the new cloud division will generate monthly revenue of $1 million in April.
According to a previous report by Bloomberg, the German regulatory authority filed a complaint against Northern Data executives, accusing them of falsely reporting the revenue in October 2021. The company stated that the case has been closed and no further action will be taken.