Hut 8 Receives $150M Investment as Thirst for Energy Brings AI Firms to Bitcoin Miners

Coatue Management invests $150 million in crypto miner Hut 8 to build AI-related infrastructures

The deal benefited HUT shares as well as other bitcoin mining-related data center stocks such as SHLN, APLD.

Coatue is also behind cloud computing firm CoreWeave, which is looking to acquire Hut 8 rival Core Scientific.

Artificial intelligence (AI) firms’ thirst for power is unquenchable, and bitcoin {{BTC}} miners are making money.

Shares of Bitcoin miner Hut 8 (HUT) outperformed most peers on Monday after the Miami-based company received a $150 million investment from Coatue Management to build artificial intelligence (AI) infrastructure.

According to the statement, the financing will be provided through convertible notes with an annual interest rate of 8% and a conversion rate of $16,395 per share. Hut 8 shares were up nearly 4% in Monday morning trading. Many of the company’s peers are following BTC’s decline.

The investment supported other Bitcoin mining-related data centers on Monday, which also provide artificial intelligence and high-performance computing (HPC) services. Soluna Holdings (SLNH) is up about 17% and Applied Digital (APLD) is up about 10%.

AI and HPC firms are increasingly looking to the bitcoin mining industry to secure their needs for computing power. Miners often already have computing capacity and have agreements with power suppliers that AI and HPC desire. In fact, JPMorgan said energy demand from large-scale data centers and AI firms could usher in a new era of mergers and acquisitions for Bitcoin miners with attractive energy contracts.

Recently, cloud computing provider CoreWeave signed a 200 megawatt (MW) deal with miner Core Scientific (CORZ) for AI-related services and offered to acquire the entire company for more than $1 billion. Core rejected the takeover, saying the company was undervalued.

Interestingly, Coatue Management is one of the investors in CoreWeave, highlighting the level of interest in using Bitcoin miners’ existing infrastructure to power AI-related services.

Hut 8 reaffirmed the need for this power in Monday’s press release.

“Many traditional data center operators are unable to meet the growing demand for AI computing capacity due to power outages, long lead times to bring new capacity online, and the extensive upgrades required for existing data centers to support the latest generation of high-density computing,” he said. . That’s a gap Hut 8 says it can help narrow.

Read more: JPMorgan Says Bitcoin Miners With Attractive Power Contracts Are Potential M&A Targets