Tether Invests $420 Million in AI Chips and Bitcoin Mining Firm
Tether Group, the company behind the popular stablecoin Tether, has made a significant investment of $420 million in artificial intelligence (AI) chips. The company has purchased 10,000 H100 graphics processing units (GPUs) from Nvidia, which are in high demand among AI-focused companies for data processing. In addition to this purchase, Tether will acquire a 20% stake in Northern Data, a German bitcoin miner that plans to lease the GPUs to AI startups.
Complex Deal Structure Raises Questions
The investment is being channeled through an Irish shell company called Damoon, raising some confusion and speculation about the motives and legality of the deal. Northern Data will own a 70% stake in Damoon, with an unclear cost structure for acquiring the remaining 30%. Despite the complex structure, Tether’s motivations for the investment are starting to become clear.
Tether’s Investment Elevates Northern Data
This significant purchase by Tether could position Northern Data as one of the largest cloud GPU operators in Europe. With demand for GPUs far exceeding supply, Northern Data CEO Aroosh Thillainathan sees this as a golden opportunity to secure 2% of the sought-after H100 GPUs.
Transitioning from Crypto Mining to AI Applications
Northern Data is not the first company to repurpose GPUs for AI applications. Other crypto miners have also shifted their focus to renting out their GPUs to AI ventures. Nvidia’s CEO has noted a growing trend of businesses becoming specialized GPU cloud service providers.
An Unprecedented Investment
The scale of Tether’s investment is remarkable and surpasses the budgets allocated by some countries. For comparison, the British government allocated $120 million for GPUs, while Saudi Arabia reportedly purchased 3,000 H100s from Nvidia. This deal is significant by any standards.
Controversies Surrounding Northern Data and Tether
Northern Data has faced legal battles and scrutiny for financial inconsistencies. Tether, on the other hand, has been fined for misleading claims about its stablecoin’s financial backing. Despite these controversies, Tether has reported significant profits and announced a share buyback.
Hot Take: Tether’s GPU Investment Adds Complexity to Crypto Landscape
Tether’s massive investment in AI chips highlights the growing demand for GPUs in the AI sector. However, it also introduces complexity and intrigue into the ever-evolving crypto landscape. As companies like Tether and Northern Data navigate these investments, questions about motives and legality continue to arise.
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