Tether Invests $420 Million in GPU Chips for German Crypto Mining Firm
Tether Holdings, the company behind the popular stablecoin Tether (USDT), has made a significant investment in the AI tech sector. The company has purchased 10,000 Nvidia H100 GPUs for a staggering $420 million. These GPUs are highly sought after for their ability to process large amounts of data, making them essential for artificial intelligence applications.
A Stealthy Move by Tether
Tether has not officially announced this investment, but Forbes has reported on it based on information from Northern Data and its executives. According to Forbes, Tether’s acquisition consists of 100,000 Nvidia H100 GPUs, which represents about 2% of Nvidia’s projected GPU shipments for the year.
Interestingly, Tether acted as an intermediary in the transaction, purchasing the GPUs on behalf of German Bitcoin miner Northern Data. In return, Tether will own a 20% stake in Northern Data.
The purchase was made through an Irish shell company called Damoon, which is owned by Northern Data. Northern Data itself will hold a 70% stake in Damoon with an option to acquire the rest at an undisclosed cost.
Northern Data’s Pivot to AI
Northern Data’s decision to enter the AI market aligns with a growing trend among Bitcoin mining companies looking for new sources of revenue. Nvidia CEO Jensen Huang has acknowledged this shift, citing Coreweave’s success in transitioning from crypto mining to GPU-specialized cloud services.
Northern Data CEO Aroosh Thillainathan revealed that Tether’s involvement was necessary due to a scarcity of Nvidia chips. This partnership raises questions about the future collaboration between crypto companies and AI hardware providers.
A Controversial Partnership
Forbes also highlighted past controversies associated with Northern Data, including purchasing hardware through shell companies and challenges with financial reporting. German regulators filed a criminal complaint related to inaccurate revenue reports, although no further action was taken.
Tether has faced controversies as well, particularly regarding the transparency of its reserve assets. The company was fined $21 million in 2022 for making misleading claims about its financials. Despite these challenges, Tether has achieved impressive financial results, with over $1 billion in profits last quarter and a recently announced $115 million share buyback.
Hot Take: Tether’s Bold Move into AI Tech
Tether’s investment of $420 million in GPU chips for a German crypto mining firm demonstrates its commitment to expanding into new industries. By entering the AI tech sector, Tether aims to leverage the power of artificial intelligence and position itself as a key player in this rapidly growing field.
This move also raises intriguing questions about the relationship between crypto companies and AI hardware providers. As Bitcoin mining companies explore new revenue streams, partnerships like the one between Tether and Northern Data may become more common.
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