Bitcoin Miner Hut 8 Receives $150M to Build AI Infrastructure

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Tanzeel Akhtar

Journalist

Tanzeel Akhtar

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Tanzeel Akhtar has been covering the cryptocurrency and blockchain sector since 2015. She has written for the Wall Street Journal, Bloomberg, CoinDesk, Bitcoin Magazine and Bitcoin.com.

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Last updated: 

June 25, 2024

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Bitcoin mining firm Hut 8 said it will receive $150 million through convertible notes from Coatue Management, with plans to use the funding to build an artificial intelligence infrastructure platform.

The investment will be used to address a critical gap in the market: the surging demand for AI computing capacity. Many traditional data centre operators are increasingly unable to meet this demand due to a variety of challenges, including power shortages.

There are also lengthy lead times to bring new capacity online, and the need for extensive upgrades to support the latest high-density computing technologies.

Convertible Notes Are a Popular Financing Tool

The convertible note from Coatue Management also shows investor confidence in Hut 8’s strategic direction and its ability to execute its AI infrastructure platform.

Convertible notes are a popular financing tool, allowing the investment to convert into equity under predefined conditions, aligning the interests of both the company and its investors. This structure not only provides immediate capital but also signals a long-term commitment to the company’s growth.

AI Industry Experiencing Growth

Hut 8’s initiative comes at a time when the AI industry is experiencing exponential growth, driven by advancements in machine learning, data analytics, and the increasing integration of AI into various sectors.

The firm’s transition to AI infrastructure also reflects a broader trend of technology companies adapting to meet the evolving demands of the digital economy.

Miners Expand Operations To AI Data Centers

Recently there have been several Bitcoin miners diversifying operations to support AI data centers amid struggles to stay profitable, reports Rachel Wolfson for CryptoNews.

Data from Bitinfocharts show that the average BTC transaction fee on April 19, the day of the Bitcoin halving, surged to $127. Yet this has since plummeted to around $4 at the time of writing.

As a result, both Bitcoin fees and miner revenue have declined. For example, Bitcoin mining farm Bitfarms saw a 42% revenue loss in May. According to a company production and operations report, Bitfarms held 263 Bitcoin (BTC) ($18.1 million) in April but only 156 Bitcoin ($10.7 million) in May. Bitfarm described this as the “first full month with post-halving economics.”