Hut 8 Corp. (NASDAQ: HUT) (TSE: HUT) has entered into a substantial USD$7 billion agreement to lease and develop a large-scale data center in Louisiana, marking a significant step in its expansion into artificial intelligence (AI) infrastructure. The company announced on Wednesday that it will initiate a 15-year lease to construct a 245-megawatt facility at the River Bend campus, with the first phase of construction set for completion by early 2027.
The announcement sparked a notable increase in shares, which rose approximately 21 percent in premarket trading, building on an impressive year-to-date gain of roughly 80 percent. This move is reflective of a wider trend wherein former cryptocurrency miners are pivoting towards hosting AI workloads. Notable firms like CoreWeave Inc (NASDAQ: CRWV) and Applied Digital Corp. (NASDAQ: APLD) are repurposing energy-intensive sites that were primarily used for bitcoin mining.
These facilities offer crucial amenities such as access to high-voltage power, advanced cooling systems, and specialized real estate, all of which are becoming increasingly valuable as AI developers race to deploy Nvidia Corp. (NASDAQ: NVDA) graphics processing units. Over the past year, Hut 8 has transformed its business model from focusing solely on bitcoin mining to establishing itself as an energy infrastructure platform, a strategic pivot designed to capitalize on the growing demand for data centers.
The Louisiana project also includes partnerships with AI model developer Anthropic and infrastructure firm Fluidstack. Notably, Alphabet Inc. (NASDAQ: GOOGL), through its Google division, will provide financial backing for the 15-year lease, reflecting the pressing need among major cloud service providers to secure reliable long-term capacity for power-intensive AI systems.
In tandem with this agreement, Hut 8 and Anthropic aim to expand their collaboration to potentially scale up to around 2.3 gigawatts of data center capacity. Last month, Anthropic announced plans to invest approximately USD$50 billion in data centers alongside Fluidstack, underscoring the intensifying demand for AI infrastructure.
Hut 8 has reported an extensive power development pipeline of 8.65 gigawatts across North America, which includes projects at various stages of development. While initially focused on operating energy-heavy bitcoin mining facilities, the company has re-evaluated its strategy due to rising costs and diminishing margins in the cryptocurrency space.
To alleviate these pressures, Hut 8 has opted to separate its mining operations from its broader infrastructure goals. In 2024, the company plans to carve out its mining assets into a distinct entity, thereby enhancing capital flexibility and reducing risk. This restructuring allows Hut 8 to concentrate on data centers, power development, and energy services, while also pursuing new ventures, including a high-profile partnership linked to Eric Trump, a prominent business figure.
Through this collaboration, Hut 8 aims to maintain a foothold in bitcoin mining while exploring more lucrative opportunities. The ongoing structural pressures faced by many miners due to soaring global bitcoin hashrates have necessitated this strategic shift. As more machines are deployed, competition grows, leading to thinner rewards and increased operational costs.
Electricity costs, hardware depreciation, and cooling expenses are significant factors impacting profitability. Moreover, periodic bitcoin “halving” events reduce block rewards, further squeezing margins. These challenges have compelled firms to seek more stable revenue streams, with high-performance computing offering attractive long-term contracts and predictable cash flows.
AI and cloud customers often pay premium prices for dependable power, cooling, and secure facilities. Consequently, former miners, such as Hut 8, are well-positioned to meet these demands given their existing infrastructure. As the landscape evolves, the shift from cryptocurrency mining to AI and energy services represents a natural progression for companies aiming to thrive in a rapidly changing market.
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