- Tether is making a $420 million investment in 10,000 H100 GPUs via Northern Data which plans to rent the chips to AI startups.
- The highly sought chips will see Tether gain a 20 percent share in the German-listed Bitcoin miner.
USDT stablecoin issuer Tether has completed an unusual investment that sees the company venture into the Artificial intelligence (AI) business. Tether Group, the crypto company behind the $86.5 billion stablecoin Tether, will be spending $420 million on the highly sought-after $40,000 computer chips. By acquiring Nvidia’s H100 chips via German-listed Bitcoin miner, Northern Data, Tether will gain a 20 percent stake in the company.
Northern Data plans to rent the chips to AI startups. This is a growing industry whose value is nearly 100 billion U.S. dollars and is expected to grow exponentially to nearly two trillion U.S. dollars by 2030.
With the crypto landscape shifting, Tether and Northern Data are not the first crypto miner that is looking into the AI space for additional revenue. Earlier this year, NVIDIA CEO Jensen Huang highlighted crypto miner Coreweave which switched from using chips to run the calculations used in Ethereum mining to powering InflectionAI and Microsoft’s AI projects. Hive, Crusoe, and Hut 8 have also seen their Ethereum mining GPUs rendered useless since the network shifted from a Proof of Work (PoW) protocol to a Proof of Stake (PoS) consensus mechanism.
Financial Times reported that Nvidia was expected to ship a total of 550,000 H100 chips this year. Northern Data CEO Aroosh Thillainathan is celebrating getting 2 percent of the hottest GPU available as everyone is running short on GPUs. Interestingly, this is far more than what the British government and Saudi Arabian government have allocated with a $120 million budget for GPUs 3,000 of Nvidia’s H100 respectively.
Furthermore, this could make the company the largest cloud GPU operator in Europe outside of cloud computing giants like Amazon, Microsoft Azure, and Oracle.
An Unexpected Tether-Northern Data Alliance
Northern Data which often conducts business through shell companies will buy the chips through an Irish shell company, called Damoon. Northern Data will take a 70 percent stake in return for shares equivalent to 20 percent of its ownership.
The investment by Tether comes as a surprise but while a positive development of the two companies has been viewed as a partnership of controversial companies. Tether has in the past raised controversy for its lack of transparency around assets in its reserve which back its USDT stablecoin. Northern Data on the other hand has been probed by German regulators over claims of misstated revenues in October 2021.
Earlier this year, Tether invested in an unnamed Uruguay Bitcoin (BTC) mining firm. According to the official statement, the company is investing in renewable energy sources to support and promote sustainable Bitcoin mining.
