Bitcoin Miner Hut 8 Announces $150 Million Investment from Coatue Management
Data Center Expansion
Bitcoin mining company Hut 8 announced that Coatue Management, a technology-focused investment firm, will invest $150 million through a convertible note. This funding will significantly accelerate Hut 8’s expansion of its data center portfolio.
Expanding the Data Center Portfolio
These funds will expedite Hut 8’s growth in data centers. These facilities, which house large-scale crypto-mining operations, require energy-intensive infrastructures capable of supporting artificial intelligence (AI) compute. With the rapid growth of generative AI in the past year, there is increased competition among AI firms for these facilities. Traditional data center operators face challenges such as power shortages, long lead times for capacity expansion, and extensive upgrades to support high-density computing.
Leveraging Expertise for AI Infrastructure
Hut 8 aims to leverage its expertise in developing and operating complex energy infrastructures to meet this high demand. This positions the company as a leader in the AI infrastructure market. Currently, Hut 8 operates 19 sites, including 10 Bitcoin mining, hosting, and managed services locations in Alberta, Canada, New York, and Texas. It also manages five high-performance computing data centers in British Columbia and Ontario, along with four power generation assets in Ontario.
Partnership with Coatue Management
Asher Genoot, CEO of Hut 8 Mining, expressed excitement about the partnership with Coatue, citing the firm’s extensive expertise and successful track record in the AI ecosystem. He stated, “We believe this partnership will unlock significant opportunities and connectivity to the broader space as we enter this next phase of growth.”
Industry Trend Towards AI
This investment comes at a pivotal moment as many Bitcoin miners are pivoting towards AI due to declining revenues. For example, Core Scientific recently secured a $3.5 billion contract with AI startup CoreWeave.
Note Details
The convertible note will carry an 8% annual interest rate and initially span five years, extendable by up to three additional one-year periods. It represents a senior unsecured obligation of the company, with an initial conversion price set at $16.395 per share of common stock, marking a 45% premium to the 10-day volume-weighted average price. The transaction is expected to close by July 11th.
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