Tether Bets Big On AI Tech Through Cloud GPUs

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Tether has invested a whopping $420 million to purchase thousands of GPU chips for a German crypto mining firm through an Irish shell company.

Tether’s $420M Investment

Tether Holdings, the crypto company renowned for its $86.5 billion stablecoin Tether (USDT), has entered the AI tech arena with a hefty investment. The company recently made a significant purchase of 10,000 Nvidia H100 GPUs, a coveted hardware asset in the AI sector, for a staggering $420 million. These GPUs are in high demand for their prowess in heavy-duty data processing, a vital component in artificial intelligence applications.

Tether’s Stealthy Move

While Tether has not made an official announcement about this strategic investment, Forbes broke the story based on insights from Northern Data and its executives. According to Forbes’ report, Tether’s $420 million acquisition comprises 100,000 Nvidia H100 GPUs, constituting approximately 2% of Nvidia’s projected GPU shipments for the year.

Intriguingly, Tether acted as the intermediary in this transaction, procuring the GPUs on behalf of Northern Data, a German Bitcoin miner. In return, Tether secures a substantial 20% ownership stake in Northern Data.

However, the purchase was not made directly but instead through an Irish shell company called Damoon which is in turn owned by Northern Data. previous announcements have revealed that Northern Data itself will hold a 70% stake in Damoon, with a provision to acquire the rest for an undisclosed acquisition cost.

Northern Data’s AI Pivot

Northern Data’s decision to plunge into the AI market aligns with a growing trend among Bitcoin mining companies seeking new revenue streams. Nvidia CEO Jensen Huang previously acknowledged this shift during an earnings call, citing the success of Coreweave’s transition from crypto mining to GPU-specialized cloud services.

Aroosh Thillainathan, CEO of Northern Data, disclosed that Nvidia’s chip scarcity prevented them from securing the GPUs directly, necessitating Tether’s involvement in the purchase. This intriguing partnership raises questions about the nature and future of collaboration between crypt

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Author: Amara Khatri

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