Tether-Owned AI Firm Contemplates Sale of Bitcoin Mining Division
AI
Bitcoin Mining
Tether
Northern Data, a company owned by Tether, is currently considering the sale of its Peak Mining division. The move is aimed at redirecting funds towards the expansion of its AI capabilities and the development of Europe’s largest Generative AI cloud platform.
Northern Data, a German infrastructure company specializing in cryptocurrency and artificial intelligence, has announced its intention to explore the possibility of selling its Peak Mining unit. The company plans to use the proceeds from the sale to further enhance its artificial intelligence operations.
The announcement has had a significant impact on Northern Data’s stock prices, with shares experiencing a surge of up to 12% and stabilizing at a 9.8% increase by 12:06 p.m. in Frankfurt.
The decision to sell Peak Mining is closely tied to the current market conditions in the cryptocurrency industry. Bitcoin prices have seen a significant increase of over 60% this year, nearing the all-time high of $73,798 reached in March. This rise in value is particularly crucial for Bitcoin miners, who have faced challenges since the Bitcoin halving event in April, which reduced their primary source of revenue.
To overcome these challenges, some mining companies, including Northern Data, have shifted their focus from mining to artificial intelligence. By selling its Peak Mining division, Northern Data will be able to strengthen its AI solutions unit. This unit includes a generative AI cloud platform that helps businesses launch their AI-powered applications.
In addition to boosting its AI capabilities, Northern Data plans to enhance its Dynamic Enablement Services by introducing new software capabilities and managed services that cater to the evolving demands of the AI market. The company also intends to invest in data center acquisitions and acquire advanced AI GPUs to enhance its infrastructure.
Following the recent announcements, Northern Data’s shares experienced a 10.69% surge on the Frankfurt Stock Exchange, reaching €35.20. This rise in share prices reflects the company’s strong performance in Q2, where it reported a 22% increase in revenue, generating €26 million. Despite the challenges posed by the Bitcoin halving, Northern Data’s cloud platform and investments in data centers and mining operations contributed to its growth.
In September 2023, Tether, a prominent player in the cryptocurrency industry, announced its collaboration with Northern Data, focusing on AI, peer-to-peer communications, and data storage solutions. Although Tether denied making a $420 million investment for 10,000 H100 GPUs from Northern Data, it has been accumulating shares in the company for over a year. According to reports from the Financial Times, Tether is the majority owner of Northern Data, holding 51% of the stock.
Northern Data has projected a three-fold increase in its full-year revenue for 2024, driven by the growing demand for AI computing services. The company is also exploring the possibility of listing its AI cloud computing and data center businesses in the United States, with a potential valuation of up to $16 billion.
