Tether Group, the company behind the renowned $83.2 billion stablecoin Tether (USDT), has entered a significant $420 million deal that combines artificial intelligence chips and an overseas Bitcoin mining firm, according to Forbes. The unexpected partnership between Tether and German-listed bitcoin miner Northern Data is set to disrupt the tech industry, where a $40,000 computer chip has become one of the hottest commodities, particularly for AI applications.
The tech industry is currently witnessing a race among startups to secure Nvidia’s H100 GPUs, the preferred graphics processing unit for artificial intelligence companies dealing with massive data processing tasks. These powerful chips have become indispensable for organizations seeking to harness AI’s potential.
Northern Data is the latest player in the Bitcoin mining sector to pivot towards the booming AI market as a new source of revenue. Nvidia CEO Jensen Huang acknowledged this trend during an earnings call in August, mentioning former crypto miner Coreweave’s successful transition into GPU-specialized cloud service provision. Coreweave, based in New Jersey, shifted from using these chips for Ethereum mining to powering InflectionAI and Microsoft’s AI projects. The company’s strategic pivot garnered substantial investments, with $2.3 billion in debt raised in August following a $421 million Series B round earlier in the year.
Other mining firms like Hive, Crusoe, and Hut 8 have also followed suit, repurposing GPUs that became obsolete for Ethereum mining after the cryptocurrency’s energy-saving overhaul in September 2022. These firms now lease their GPUs to startups on an hourly basis, capitalizing on the growing demand for these high-performance chips.
In the case of Northern Data, their ambitious move involves securing a 70% stake in Damoon, a significant step towards their goal of becoming a major player in the cloud GPU market. While further acquisition plans remain unclear, Forbes reports suggest that Northern Data might acquire the remaining portion of Damoon in the future, pending undisclosed terms and conditions.
Northern Data CEO Aroosh Thillainathan explained that the company had to resort to this unique deal with Tether because of the rapid depletion of Nvidia’s chip availability. This situation highlights the extreme demand for Nvidia’s H100 GPUs and the challenges companies face in securing them directly from the manufacturer.
Tether’s foray into this unconventional partnership raises eyebrows in the crypto industry. The company is best known for its USDT stablecoin, which has amassed $83 billion in market capitalization. However, Tether has not been without controversy, with concerns about transparency regarding the assets backing its stablecoin. This new investment in AI chips and Bitcoin mining signifies a notable departure from Tether’s traditional operations and underscores the evolving landscape of the cryptocurrency sector.
Read more:
- Paolo Ardoino Unveils Ambitious Venture: Tether Energy’s Renewable Energy And Bitcoin Mining Initiative
- Tether Halts USDT Minting And Issuance On Polkadot’s Kusama, Bitcoin Omni, And BCH Chains
- Bitfinex And Tether CTO Paolo Ardoino To Be Deposed Amid Ongoing Class-Action Lawsuit
- Tether Denies Affiliation With StUSDT Amidst Growing Speculation