Whinstone CEO Chad Harris took CNBC on a tour of the largest Bitcoin mining farm in North America.
Cryptocurrency companies are suddenly at the center of trading. The catalyst is artificial intelligence.
Bitcoin mining companies have massive data centers with access to fiber optic lines and large amounts of electricity across the United States. They are exactly the type of facilities needed for compute-intensive AI operations, which means their sites and technology are in high demand.
At the same time, miners need to diversify. Following Bitcoin’s April halving, which occurs roughly every four years, profits from businesses that generate new coins have plummeted. JPMorgan analysts wrote in a report earlier this month that “some operators are feeling the financial pressure from the recent block reward halving, which cut industry revenue in half, and are actively exploring exit strategies.
Mergers, financings and partnerships are coming together at a rapid pace as the booming artificial intelligence industry demands capacity and Bitcoin miners seek new ways to generate returns on their massive capital investments.
On Tuesday, US Bitcoin miner Core Scientific announced an expanded deal with CoreWeave. Nvidia– The startup supported is one of the leading providers of technology for running artificial intelligence models for chip manufacturers. Core Scientific will provide 70 megawatts of computing infrastructure to support CoreWeave’s operations.
core science transaction theory An additional $1.2 billion will be generated over 12 years, on top of existing arrangements expected to generate $3.5 billion in revenue. Overall, the company plans to deliver approximately 270 MW of infrastructure to CoreWeave in the second half of 2025, with the potential to add an additional 230 MW at other Core Scientific sites.
Earlier this month, CoreWeave supply The acquisition of Core Scientific for $1.02 billion came shortly after the two parties initially reached an agreement. Core Sciences rejected the bid. The company returned to the public markets in January after going through bankruptcy and is now valued at about $1.8 billion.
“The world is changing, and many data centers built over the past 20 years are not suitable to support the computing needs of the future,” Core Scientific CEO Adam Sullivan said in a press release Tuesday.
A day before the announcement, Bitcoin mining group Hut 8 said Raises $150 million in debt from private equity firm Coatue Help it build its artificial intelligence data center product portfolio.
Cabin 8Based in Miami, it is one of many cryptocurrency mining companies turning to artificial intelligence. The company said in a statement First quarter financial report Last month, the company purchased its first 1,000 Nvidia graphics processing units (GPUs) and signed a customer agreement with its venture-backed artificial intelligence cloud platform. According to CoinShares, 6% of Hut 8’s sales come from artificial intelligence.
“The broader market is beginning to recognize the scarcity of high-quality power assets, and Hut 8 has built a portfolio of attractive expansion assets,” Coatue partner Robert Yin said in the funding announcement.
Hut 8 CEO Asher Genoot recently told CNBC that his company “finalized commercial agreements for our new artificial intelligence vertical under a GPU-as-a-service model, including customer agreements that provide fixed infrastructure payments and revenue sharing.”
Bit Digital sells tokens to buy GPUs
Bit Digital is a Bitcoin miner that currently derives an estimated 27% of its revenue from artificial intelligence. explain On Monday, the company struck a deal with a customer to supply 2,048 Nvidia GPUs over three years, doubling the number of processors it offers to that customer.
To fulfill the contract, Bit Digital ordered 256 servers Dell Technologies, and will soon deploy them in a data center in Iceland. The company said the contract is expected to generate $92 million in annual revenue. It pays for GPUs in part by dumping some cryptocurrency.
Bit Digital said: “The company intends to fund the transaction through a mixture of cash and digital assets on its balance sheet.”
Bit Digital has also signed a so-called sale and leaseback agreement for half of the new GPUs, “which will accordingly reduce the company’s capital expenditures.” Through leaseback, another company owns these GPUs and Bit Digital leases them back to generate revenue by providing the technology to customers.
People line up to buy T-shirts at a pop-up booth on Wall Street following the IPO of online brokerage Robinhood in New York City early July 29, 2021.
Spencer Pratt | Getty Images
While most recent cryptocurrency transactions involve miners, there is at least one notable exception.
Earlier this month, the trading platform Robin Hood Agreed to acquire Bitstamp, a Luxembourg-based cryptocurrency exchange, for approximately $200 million in cash.
Bitstamp has 50 active licenses and registrations worldwide and is popular in Europe and Asia. Helpful to purchase Robin Hoodis a retail-focused trading app that strengthens its cryptocurrency business to better compete with Binance and Coin library.
The deal is set to close next year as Robinhood faces regulatory challenges in the U.S. over cryptocurrency trading. In May, the company said it received a Wells notice regarding its crypto business. The U.S. Securities and Exchange Commission has also sued Coinbase and Binance.
Robinhood had $4.7 billion in cash and equivalents at the end of the first quarter. Its shares are up 75% this year.
About The Author
