Bitcoin mining company Hut 8 has secured a strategic funding of $150 million from Coatue to enhance its data center capabilities for artificial intelligence (AI). The funding, which is in the form of convertible notes with an 8% annual interest rate, aims to support Hut 8’s expansion into the AI infrastructure market and establish itself as a leader in the sector. While the exact location of Hut 8’s new platform is not specified, the funding is expected to help the company meet the increasing market demand and position itself as a prominent player in the AI infrastructure market. Hut 8, which is based in Miami, operates multiple cryptocurrency mining sites in Canada but has recently reduced its presence there due to rising energy costs.
Hut 8 CEO Asher Genoot expressed excitement over the funding, stating that it will unlock significant opportunities and provide connectivity to the broader space as the company enters its next phase of growth. Genoot also expressed enthusiasm about partnering with Coatue, citing the firm’s extensive expertise and successful investments in the AI ecosystem.
The convertible notes issued by Hut 8 will have an initial term of five years, with options for three one-year extensions, offering flexibility in repayment terms. Coatue, an investment manager, has previously invested in various AI companies, including OpenAI and CoreWeave.
In the six months leading up to December 31, 2023, Hut 8 reported revenue of $60.6 million, marking a 32% increase compared to the previous period. The company’s earnings report also revealed a significant rise in net income to $6.2 million, compared to a net loss in the prior period.
In related news, Marathon Digital has paid Hut 8 $13.5 million to operate two Bitcoin mining sites.