Coatue Management is investing $150 million in crypto miner Hut 8 to build AI-related infrastructures
The deal benefited HUT's shares as well as other bitcoin mining-related data-center stocks such as SHLN, APLD.
Coatue is also behind CoreWeave, a cloud-computing firm that is looking to buy Hut 8 rival Core Scientific.

Can Miners Survive Lower Bitcoin Fees and Reduced Rewards?

15:03

Big Tech Comes to Small Town: A Bitcoin Mining Story in Spur

00:39

What's the Biggest Misconception People Have About Bitcoin Mining?

01:47

What You Need to Know About the Bitcoin Halving

04:20

Bitcoin Miner Bitfarms Warns of Default

The thirst for power by Artificial intelligence (AI) firms is unrelenting, and bitcoin (BTC) miners are cashing in.

Bitcoin miner Hut 8 (HUT) shares outperformed most peers on Monday after the Miami-based company received a $150 million investment from Coatue Management to build artificial intelligence (AI) infrastructure.

The funding will be through convertible notes with an 8% annual interest rate and a conversion rate of $16.395 per share, according to a statement. Hut 8 shares rose almost 4% in Monday morning trading. Most of the company's peers are following BTC lower.

The investment provided a boost for other bitcoin mining-related data centers that also service AI and high-performance computing (HPC) on Monday. Soluna Holdings (SLNH) surged nearly 17% and Applied Digital (APLD) added about 10%.

AI and HPC firms are increasingly looking to the bitcoin mining industry to secure their need for computing power. The miners often already have the computing capacity and the deals with power suppliers that AI and HPC hanker after. In fact, JPMorgan said that the demand for power by large-scale data centers and AI firms could start a new era of mergers and acquisitions for bitcoin miners with attractive power contracts.

Most recently, cloud computing provider CoreWeave signed a 200 megawatt (MW) deal with miner Core Scientific (CORZ) for AI-related services and offered to buy the whole company for more than $1 billion. Core rejected the takeover, saying it undervalued the company.

Interestingly, Coatue Management is one of the investors in CoreWeave, underlining the level of interest in utilizing bitcoin miners' current infrastructure to power AI-related services.

Hut 8 reaffirmed this need for power in Monday's press release.

"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," it said. That's a gap Hut 8 says it can help narrow.

Edited by Sheldon Reback.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Hut 8 Receives $150M Investment as Thirst for Energy Brings AI Firms to Bitcoin Miners

The funding came from Coatue Management, which is also an investor in CoreWeave, a cloud-computing firm looking to take over miner Core Scientific.

Can Miners Survive Lower Bitcoin Fees and Reduced Rewards?