Cryptomine firm Hut 8 has raised $150 million from investment firm Coatue to fund its expansion into serving AI customers.
Soluna, another cryptomine firm pivoting to AI, this week raised $12.5 million for its GPU cloud.
Hut 8 raises $150 million from Coatue
The company, which describes itself as “one of North America’s largest Bitcoin miners,” this week announced a fund managed by Coatue Management, L.L.C. had entered into a definitive agreement to invest $150 million into the crypto company through a convertible note.
“We are thrilled to be partnering with Coatue, given the firm’s deep expertise and long track record of investments in the AI ecosystem,” said Asher Genoot, Hut 8 CEO. “We believe this partnership will allow us to unlock significant opportunities and connectivity to the broader space as we enter this next phase of growth.”
According to a company presentation on the Coatue investment, the proceeds will be used to fund growth capital expenditures. In the press release, both companies emphasize the opportunity to expand further into the AI space.
“Many traditional data center operators are failing to meet the surging demand for AI compute capacity due to power shortages, long lead times to bring new capacity online, and the extensive upgrades required for existing data centers to support the latest generation of high-density compute,” Hut 8 said in the release. “Hut 8 believes it can leverage its proven ability to develop and operate complex energy infrastructure to address unmet demand and emerge as a leader in the AI infrastructure market.”
Florida-based Hut 8 has a portfolio comprising nineteen sites: ten Bitcoin sites in Alberta, New York, and Texas; five high-performance computing data centers in British Columbia and Ontario, Canada; and four power generation assets in Ontario. It acquired five colo data centers in Canada from TeraGo in 2022. According to the latest company presentation, Hut 8 has 1,100MW of secured capacity in its pipeline.
“The broader market is beginning to appreciate the scarcity of high-quality power assets, and Hut 8 has built a deep pipeline of highly attractive expansion assets,” said Robert Yin, Partner at Coatue. “We believe their differentiated energy strategy and track record of fast, cost-efficient development will continue to drive competitive advantage as they execute on these opportunities."
The note has an initial term of five years, and up to three 1-year extensions. Coatue has the right to convert the note into company shares, subject to certain limitations. The deal is set to close in July.
Coatue has previously invested in GPU cloud provider (and former cryptofirm) CoreWeave across multiple rounds, as well as GPU cloud company Together AI and AI chip companies Cerebras and SiFive, as well as generative AI firms Stability.ai, Hugging Face, and Scale, and several battery companies.
Soluna raises $12.5 million for cloud offering
Soluna, another cryptomine firm targeting AI, this week announced it had raised a credit facility of $12.5 million at its new subsidiary Soluna Cloud, Inc.
The company said this marked the completion of the first tranche in a larger fundraising effort led by BitOoda Technologies and Imperial Capital.
The financing will support the launch of Soluna Cloud, and procure Nvidia H100 GPUs leveraging a three-year managed-services agreement at a hydro-powered data center in collaboration with the company’s OEM partner.
Soluna announced plans for a GPU-based AI cloud service in May 2024 in collaboration with an unnamed GPU provider. The company is leveraging Nvidia’s H100 GPUs for the service.
Soluna said it expects to generate $16-$26 million in revenue per year as the site is fully deployed with its customers, totaling between $38-$80.0 million across the contract lifetime.
“This is a pivotal point for Soluna Cloud as we are now able to open our waitlist for this highly anticipated business at Soluna. AI is set to transform the enterprise, and Soluna is making a vital contribution to making it a climate-friendly reality,” said John Belizaire, CEO of Soluna.
Soluna is a developer, designer, and operator of digital infrastructure. The company said it uses surplus renewable energy and repurposes it for HPC, Bitcoin mining, Generative, AI, and other compute-intensive applications.
The company currently operates the Dorothy 1 & 2 and 166MW Project Kati sites in Texas and the 25MW Project Sophie site in Kentucky. Previously, the company also owned another facility in Kentucky and one in Washington, but exited both in 2023 and 2022 respectively.
