Whinstone CEO Chad Harris takes CNBC on a tour of the largest bitcoin mine in North America.
Meanwhile, miners need to diversify. After Bitcoin's halving in April, an event that happens once every four years, the business of creating new tokens has become much less profitable. Analysts at JPMorgan Chase wrote in a report earlier this month that “some operators are feeling financial losses from the recent block reward halving, which has halved industry revenue, and are making exit strategies.” Actively seeking practicality.”
The booming AI industry needs capacity and with Bitcoin miners looking for new ways to get a return on their hefty investment, mergers, financings and partnerships are coming together quickly.
On Tuesday, US bitcoin miner Core Scientific announced an extended deal with CoreWeave, the Nvidia-backed startup that is one of the chipmaker's main suppliers of technology for running AI models. Core Scientific will provide 70 megawatts of computing infrastructure to support CoreWeave's operations.
Core Scientific said the deal will generate an additional $1.2 billion in revenue over 12 years, on top of the current arrangement, which is expected to bring in $3.5 billion. In total, the company plans to deliver approximately 270 MW of infrastructure to CoreWeave by the second half of 2025, with the potential to add an additional 230 MW at other basic science sites.
Earlier this month, CoreWeave offered to buy Core Scientific for $1.02 billion, not long after its initial deal. Core Scientific rejected the bid. The company, which returned to the public market after filing for bankruptcy in January, is currently valued at about $1.8 billion.
“The world is changing, and many of the data centers built in the last 20 years are ill-suited to meet the computing needs of the future,” Core Scientific CEO Adam Sullivan said in a Tuesday press release.
A day before the announcement, bitcoin mining group Hit8 said it raised a $150 million loan from private equity firm Coatue to help build its data center portfolio for AI.
Hut 8, based in Miami, is one of many crypto mining companies that pivots on AI. The company said in its first-quarter earnings report last month that it had purchased its first batch of 1,000 Nvidia graphics processing units (GPUs) and secured a customer contract with the venture-backed AI cloud platform. According to CoinShares, Hut 8 generates 6% of sales from AI.
“The broader market is beginning to appreciate the scarcity of high-quality power assets, and Hut 8 has built a deep pipeline of highly attractive expansion assets,” said Robert Yen, a partner at Cotio, in announcing the financing.
Hit8 CEO Asher Jeannott recently told CNBC that his company has “finalized commercial agreements for our new AI vertical under a GPU-as-a-service model, in which a customer , which provides for revenue sharing in addition to payments for fixed infrastructure.”
BitDigital, a bitcoin miner that now derives an estimated 27 percent of its revenue from AI, said Monday that it has signed a contract with a customer to supply 2,048 Nvidia GPUs over three years, giving it The number of processors provided will be doubled. Unspecified client.
To fulfill the contract, BitDigital ordered 256 servers from Dell Technologies, and will soon deploy them in a data center in Iceland. The company said the deal is expected to generate $92 million in annual revenue. It's paying for GPUs, in part, by dumping some crypto.
“The company intends to finance the deal with a mix of cash and digital assets on the balance sheet,” BitDigital said.
Bit Digital also entered into a so-called sale-leaseback agreement for half of the new GPUs, “which will equally reduce the company's capital expenditures.” With a leaseback, another company owns these GPUs, and Bit Digital leases them back, generating revenue by providing the technology to users.
People line up for T-shirts at a pop-up kiosk for online brokerage Robinhood along Wall Street after the company went public with an IPO on July 29, 2021, in New York City.
Spencer Platt | Getty Images
While recent crypto deals have included miners, there has been at least one major notable exception.
Earlier this month, trading platform Robin Hood agreed to a deal to buy Luxembourg-based crypto exchange Bitstamp for about $200 million in cash.
Bitstamp has 50 active licenses and registrations worldwide, and is popular in Europe and Asia. The purchase helps Robinhood, a retail-focused trading app, bolster its crypto operations to better take on Binance and Coinbase.
The deal, due to close next year, comes as Robinhood faces regulatory challenges over its crypto transactions in the US. In May, the company said it had received a Wales notice for its crypto operations. The 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 stock is up 75 percent this year.