Mining company Hut 8 has entered into a final agreement with a fund managed by Coatue Management, which invests $150 million in the company through convertible bonds.
Hut 8 stated that they are using their capabilities in the development and operation of energy infrastructure to meet the growing demand in the AI computing market.
"We are committed to supporting innovators who promote artificial intelligence, and we believe that computing power is crucial to ensure significant growth of the entire ecosystem," said Philippe Laffont, founder of Coatue.
In his opinion, Hut 8 "has good opportunities to benefit" from the prospects that open up.
The head of the mining company, Asher Genut, noted Coatue's extensive experience in investing in the AI ecosystem.
"We believe this partnership will open up significant opportunities and connect to a wider space as we enter the next phase of growth," he added.
The initial term of the bonds is five years. The interest rate is 8% per annum with quarterly payments.
Coatue will have the opportunity to convert securities into shares in Hut 8 with certain restrictions. The initial price is set at $16,395 per common share, which includes approximately a 45% premium to the 10-day volume-weighted average quotes as of June 20.
Against the background of the announcement of the partnership with Coatue, Hut 8 shares rose from $12.03 to $12.53 during the June 24 trading session on Nasdaq.
Investors are interested in the capacities of bitcoin miners for hosting AI computing
Over the past two weeks, following Core Scientific's announcement of GPU hosting from AI company CoreWeave, investor interest in bitcoin miners has increased dramatically. This is reported by The Block with reference to the JP Morgan report.
Analysts Reginald Smith and Charles Pierce stressed that since the conclusion of the contract, the total capitalization of 14 mining companies has increased by 22%, or $4 billion. Experts attributed this to the fact that the potential of using their capacities for hosting AI computing is increasingly being recognized.
In their opinion, the $3.5 billion 12-year agreement between Core Scientific and CoreWeave "will confirm and accelerate the diversification of miners into high-performance computing (HPC) programs."
The bank's specialists suggested that bitcoin miners are well positioned to benefit from HPC hosting, since they have most of the necessary infrastructure. One of the important factors is the availability of access to cheap electricity, they stressed.
Building a data center from scratch can take up to five years, and accelerating access to electricity for three to four years will cost $105-140 million per MW, analysts added.
Iris Energy has the best opportunities to take advantage of the growing demand for HPC hosting from miners, experts say. The company operates data centers powered by fully renewable energy, has excess capacity and is "not tied" to bitcoin mining.
Smith and Pierce also expressed surprise at Riot Platforms' stance. The company, with a large amount of energy capacity, remains fully committed to mining cryptocurrencies and shows no interest in diversifying through HPC.
Recall that according to the results of May, bitcoin miners reported a drop in production due to the April halving.