In search of new revenue, bitcoin miners are diversifying their activities by hosting specialized computers for the development of artificial intelligence (AI) and providing high-performance computing (HPC) services. Northern Data, a Bitcoin miner, even announced that it was exploring the sale of its mining operations to focus on artificial intelligence. Let’s take stock.
Northern Data’s focus on AI is not surprising, especially in a context where global energy demand, particularly for AI, is exploding.
According to a report by Goldman Sachsdata centers will experience a 160% increase in energy demand by 2030, as the use of AI becomes more widespread. According to a study published by the International Energy Agency (IEA) training a large language model like GPT-3 from OpenAI, for example, consumes nearly 1,300 megawatt hours (MWh) of electricity, or the annual consumption of approximately 130 American homes. According to the IEA, a single Google search consumes 0.3 watt-hours of electricity, while a ChatGPT query consumes 2.9 (the average incandescent light bulb consumes 60 watt-hours of electricity).
If ChatGPT were integrated into the 9 billion searches performed each day, according to the IEA, electricity demand would increase by 10 terawatt hours per year, the amount consumed by around 1.5 million European Union residents.
And this energy consumption creates a problem for the AI industry: Investors are pouring money into the sector, but companies don’t have immediate access to the infrastructure needed to meet ever-growing computing needs. This is where bitcoin miners and their data centers become a lucrative option for businesses and investors.
AI and HPC, which involves solving complex, resource-intensive calculations that cannot be efficiently processed by classical computers, may seem unrelated to bitcoin mining, but such diversification has become a way for bitcoin miners to make money, as evidenced by the200 megawatt (MW) deal from Core Scientific (CORZ) with CoreWeave in June to host AI-related services.
Since bitcoin miners’ profitability and profitability depend on the computing power of their machine, they are well-positioned to revamp their facilities to take advantage of the AI wave. Many of them, especially large structures, have a very stable and powerful power supply, an efficient cooling system and high-speed, low-latency network connectivity. Which makes them a strategic option for companies looking for energy resources and data storage.
Northern Data Group, whose main shareholder is the stablecoin giant Tetherplans to offload its Bitcoin mining branch, Peak Mining, to strengthen its activity around artificial intelligence (AI). The company wishes to position itself as a major player in AI solutions, by focusing its resources and infrastructure on the development of cloud platforms and data centers dedicated to generative AI.
The sale of Peak Mining could inject significant funds into Northern Data’s ambitions, enabling the acquisition of new data centers and graphics processing units (GPUs) essential for AI intensive computing. Rosanne Kincaid-Smith, Director of Operations, sees this development as a step to offer an innovative and sustainable AI ecosystem. But if the intention is there, the timetable and the expected amount of this sale remain unclear.
At the same time, the company doubled its quarterly revenues, reaching 59 million euros in the 3rd quarter of 2024, including 48 million thanks to AI and HPC solutions, a sign that this new path could be promising. On
Status of @NorthernDataGrp in Q3 2024:
– 19,000 NVIDIA H100 Tensor Core GPUs delivered and/or deployed, with rollout of 2,000 NVIDIA H200 Tensor Core GPUs in late Q4
– On track to meet FY 2024 revenue target of EUR 200 million – EUR 240 million, tripling that of 2023, and…— Paolo Ardoino 🤖🍐 (@paoloardoino) October 18, 2024
As for Tether, which owns around 46% of Northern Data and has already granted it $843 million in financing, its mining expansion ambitions continue elsewhere, with investments announced in Latin America and at Bitdeer. For Northern Data, which could also consider an IPO in 2025 with its branches Taiga and Ardent, the sale of Peak Mining could mark a turning point towards a new era of the company centered on AI and high performance computing.
