Hut 8 receives $150 million boost for AI data center expansion Hut 8 receives $150 million boost for AI data center expansion
The miner says the investment would help to boost its data center portfolio.
2 min read
Updated: Jun. 24, 2024 at 2:57 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin miner Hut 8 revealed that it would receive a $150 million convertible note investment from Coatue Management, a technology-focused investment management firm.
Data center expansion
Hut 8 said the funds would accelerate the growth of its data center portfolio. Data centers are custom facilities housing large-scale crypto-mining operations. These facilities require energy-intensive infrastructures also capable of supporting artificial intelligence compute.
With generative AI’s rapid growth during the past year, AI firms are competing for these facilities as the traditional data center operators face several challenges, including power shortages, long lead times to bring new capacity online, and extensive upgrades to support the latest high-density computing.
However, Hut 8 believes it can leverage its expertise in developing and operating complex energy infrastructure to meet this high demand and position itself as a leader in the AI infrastructure market.
Hut 8 operates 19 sites, including 10 Bitcoin mining, hosting, and managed services locations in Alberta, Canada, New York, and Texas. Additionally, it has five high-performance computing data centers in British Columbia and Ontario and four power generation assets in Ontario.
Hut 8 Mining CEO Asher Genoot expressed excitement about the partnership with Coatue, noting the firm’s extensive expertise and investment track record in the AI ecosystem.
He added:
“We believe this partnership will allow us to unlock significant opportunities and connectivity to the broader space as we enter this next phase of growth.”
Notably, this investment comes at a pivotal moment as several Bitcoin miners pivot towards AI due to their declining revenues. Last month, Core Scientific secured a $3.5 billion contract with AI startup CoreWeave.
Note details
The convertible note will pay 8% interest annually and have an initial term of five years. Hut 8 can extend the term for up to three additional one-year periods.
Further, the note will be a senior unsecured obligation of the company. Its initial conversion price is set at $16.395 per share of common stock, a 45% premium to the 10-day volume-weighted average price. The transaction is expected to close by July 11.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Hut 8
Hut 8 is a digital asset miner with two digital asset mining sites located in Southern Alberta and a third site in North Bay, Ontario, Canada.
Core Scientific
Core Scientific is a leader in infrastructure and software solutions for Artificial Intelligence and Blockchain.