Hut 8 receives $150 million in additional support to expand its AI data center.
Bitcoin miner Hut 8 said it will receive a $150 million convertible note investment from technology-focused investment management firm Coatue Management.
Data Center Expansion
Hut 8 said the funds would accelerate the growth of its data center portfolio. The data center is a custom-built facility that houses large-scale cryptocurrency mining operations. These facilities require energy-intensive infrastructure that can support artificial intelligence computing.
The rapid growth of generative AI over the past year has left AI companies struggling as traditional data center operators face multiple challenges, including power shortages, long lead times to bring new capacity online, and extensive upgrades to support modern high densities. We are competing to secure these facilities. Computing.
However, Hut 8 believes it can leverage its expertise in developing and operating complex energy infrastructure to meet this high demand and establish itself as a leader in the AI infrastructure market.
Hut 8 operates 19 sites, including 10 Bitcoin mining, hosting, and managed service locations in Alberta, Canada, New York, and Texas. We also have five high-performance computing data centers in British Columbia and Ontario and four power generation assets in Ontario.
Hut 8 Mining CEO Asher Genoot expressed excitement about the partnership with Coatue, citing the company’s extensive expertise and investment track record in the AI ecosystem.
He added:
“We believe this partnership will unlock significant opportunities and connectivity to the broader footprint as we enter our next phase of growth.”
Notably, this investment comes at a pivotal moment as several Bitcoin miners turn to AI due to declining returns. Last month, Core Scientific signed a $3.5 billion contract with AI startup CoreWeave.
See details
The convertible note pays interest at 8% annually and has an initial term of five years. Hut 8 can be extended for up to three one-year periods.
The notes will also become a senior unsecured obligation of the Company. The initial conversion price was set at $16.395 per share of common stock, a 45% premium to the 10-day trading volume weighted average price. The transaction is expected to be completed by July 11.
