Northern Data, formerly known as Northern Bitcoin, has bought Hydro66's renewable-powered data center operating in the "Node Pole" region of Northern Sweden.
The Hydro66 site consists of six data center halls on a 2.5 hectare plot in the city of Boden. Northern Data plans to expand it to meet demand from its mainly-bitcoin customers. The area has an average annual temperature of 1.3°C, and access to 100 percent renewable power from hydroelectric plants. Hydro66 is selling the facility for €4m (US$5m) in cash and €21m ($26m) in shares of Northern Data.
Green bitcoin: wasting power efficiently
Hydro66 was launched in 2015 as a UK-based company selling climate-neutral colocation space in the Boden facility, which launched as a 2.3MW, 1,000 sq m facility with a power utilization effectiveness of 1.07. The site is right next to Facebook’s Luleå campus. In 2017, the company announced it would expand significantly, growing to 12MW with another four data halls.
However, Boden's remote location is not popular with general colocation customers, but Bitcoin miners are happy with a remote location and cheap power. In 2018, the company was bought by Canadian cryptocurrency investor Arctic Blockchain, for C$10 million (US$7.8m). Arctic Blockchain then changed its name to Hydro66.
Northern Data was founded as a cryptocurrency firm in Frankfurt, Germany in 2009, calling itself Northern Bitcoin AG, and billing itself as the "Green Bitcoin" company. At the end of 2019, it merged with its US rival Whinstone US, with Whinstone CEO Aroosh Thillainathan becoming CEO of the joint company.
In the merger, Whinstone contributed a 100-acre site in Texas which is being progressively developed as a giant data center, using cheap electricity that would previously have gone to the Texas aluminum-smelting industry - a site which Whinstone had claimed is the largest bitcoin facility in the world, which is now reportedly on track to reach 1GW. Northern Bitcoin contributed a series of European facilities, including 21 modular containers installed in Lefdal, a former mine in Norway, using hydroelectric power and cooled by fjord water.
Whinstone was reported to be more stable, as it did more of its business as a service provider for other miners, while Northern Bitcoin was seen as dependent on the wildly fluctuating value of bitcoin, as it was mostly mining for itself.
Moving on to HPC
In early 2020, the company changed its name to Northern Data, accompanying a move to downplay the company's focus on cryptocurrency. Northern Data has been promoting a move into more mainstream computing, with the announcement that it is "building a leading global infrastructure for High-Performance Computing (HPC) far beyond Bitcoin and blockchain applications," and asserting that cryptocurrency hardware and facilities can be repurposed as HPC resources for general purpose AI and machine learning.
This move has been crucial to Northern Data. In July 2020, its stock value exceeded $1 billion, but then crashed over 40 percent over Twitter posts that alleged it was overstating its move into mainstream computing. In response, Northern Data sued Twitter, according to reports in The Times and elsewhere.
In November, Northern Data commissioned a data center near Maastricht, which it reckons is "one of the largest GPU clusters worldwide." The Netherlands facility is "the Company’s first data center location in the European Union," because Lefdal Mine, in Norway, is outside the EU. In December, it announced a facility in Frankfurt.
Speaking on this week's acquisition, David Rowe, CEO of Hydro66, said, "incorporating Hydro66's assets, expertise and expansion capability into Northern Data's plans is a win for both parties. Aroosh continues to create huge value for Northern Data shareholders through a series of astute moves and I believe this proposed transaction will benefit both parties in delivering shareholder value."
Aroosh Thillainathan said: "The acquisition helps us to meet the current strong demand for HPC through our own infrastructure. Hydro66 have built a unique facility and brand in Sweden which is ideal for AI and ML type HPC applications. We intend to expand the site during the year and utilize the low power costs and exceptional green credentials of the facility to meet customer demand and deliver enhanced profitability for the Northern Data Group in 2021 and beyond."
After selling its data center Hydro66 will continue to exist in some form: the Northern Data release says Hydro66 will retain its Megamining Limited subsidiary.