Hut 8 Secures $150 Million Investment from Coatue Management to Expand AI-Related Infrastructure

Hut8 has secured a colossal $150 million from Coatue Management, causing its stock price to rise by a significant 4%. Other Bitcoin miners who provide AI-related services likewise saw their stock values increase substantially because of the news.

Bitcoinminer Hut8 has secured an investment of USD150 million from Coatue Management, leading to a rise in its stock price by at least 4%. The news also impacted the stock values of other Bitcoin miners that offer AI-related services, with Soluna Holdings (SLNH) experiencing a surge of 17% and Applied Digital (APLD) witnessing an increase of 10%. This investment highlights the expanding role of Bitcoin miners in providing computational capabilities to AI firms. As a response to the revenue challenges faced across the board due to the Bitcoin halving, miners are exploring new avenues to boost their earnings. The investment in Hut8 by Coatue will be channeled towards setting up AI-related infrastructure, a venture that will be financed through convertible notes bearing an interest rate of 8% and a conversion rate of USD16.395 per share. "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,” said Ashner Genoot, CEO of Hut8. AI firms are actively seeking additional service providers due to the limited capacity of existing data center operators to cater to their specific needs. As AI computing demands continue to escalate, the power capabilities of available data centers fall short of the requirements. This scenario presents Bitcoin miners as the optimal choice for collaboration with AI firms. Robert Yin, Partner at Coatue, noted, "The broader market is beginning to appreciate the scarcity of high-quality power assets, and Hut8 has built a deep pipeline of highly attractive expansion assets.” Miners such as Hut8 not only possess the computational capacity sought by AI firms but also have favorable agreements with power suppliers in their respective regions of operation, a crucial factor for AI firms to achieve cost-effective functioning. Other miners have also seen substantial gains from the interest in AI. Recently, CoreWeave, an AI firm backed by Coatue, entered into a USD1 billion agreement with Bitcoin miner Core Scientific for 200 megawatts of power.

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