Hut 8 Secures $150 Million Funding to Venture into AI

Several Bitcoin mining companies have increasingly vocalized their diversification strategies following the Bitcoin halving, with many venturing further into artificial intelligence.

Hut 8 is among them, recently announcing plans to build a high-performance computing (HPC) sector to support AI applications.

On Monday, the company revealed it had secured $150 million in funding through convertible bonds from technology-focused investment firm Coatue Management. The investor believes that the mining company is well-positioned to enhance its new computational capabilities and advance its AI segment.

Indeed, Hut 8 CEO Asher Genoot told Blockworks that he sees “hundreds of megawatts of opportunity” to expand upon the company’s existing footprint in this area.

He explained, “We believe that scale is significant in meeting some of the current market demands while providing us with ample capacity and growth in our Bitcoin mining operations.”

According to Yahoo Finance, Hut 8’s stock surged over 12% on Tuesday and climbed an additional 5% on Wednesday.

Core Scientific’s stock has also soared in recent weeks, thanks to a 12-year hosting contract with CoreWeave. Hut 8’s competitor announced it will host NVIDIA GPUs for the cloud provider’s HPC operations, which could potentially generate an annual revenue opportunity of $290 million.

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The Texas-based mining company built on that agreement on Tuesday, stating in a press release that it will provide an additional 70 MW to CoreWeave.

While both companies are seeking new revenue streams after the April halving event reduced mining rewards per block from 6.25 BTC to 3.125 BTC, they remain committed to Bitcoin mining. Hut 8 plans to develop its business operations in tandem, though it may adopt a contrarian approach to BTC, according to its CEO.

Genoot added, “We don’t necessarily expand when others are expanding. And we might grow when others are not, because that’s when we believe growth is cheapest and yields the best returns.”