In a recent development, Tether, the most significant issuer of stablecoins by market capitalization, has channeled $420 million into the acquisition of 10,000 Nvidia H100 graphics processing units (GPUs). This significant investment has surfaced at a period when the artificial intelligence (AI) sector is experiencing an accelerated demand. The move comes on the heels of an August report by Iris Energy stating its procurement of 248 Nvidia H100s for its bitcoin mining operations.
Tether Spends $420 Million on Nvidia H100 Units, Secures Ownership Interest in Northern Data
Iain Martin, a contributor to Forbes, reported on September 20, 2023, that Tether deployed part of its capital to buy GPUs related to artificial intelligence. The move comes subsequent to Tether’s prior disclosure about its entry into the bitcoin mining industry and its plans to hold bitcoin assets on its balance sheet.
According to Martin’s report, Tether’s $420 million investment in Nvidia H100 GPUs has been made in collaboration with Northern Data, a bitcoin mining enterprise.
This business agreement will grant Tether a 20% ownership stake in Northern Data. Northern Data’s CEO, Aroosh Thillainathan, expressed that the investment has promising potential, given the burgeoning market for AI technologies.
Thillainathan conveyed to Forbes that the partnership represented an “excellent opportunity to secure 2% of the limited GPU inventory available, as the industry grapples with GPU shortages.” The report indicates that the GPUs were procured via an Ireland-based entity named Damoon.
As per the details of the agreement, “Northern Data will acquire a 70% stake, reciprocated by Tether with a share equivalent to a 20% stake in Northern Data,” according to the Forbes article. With the AI industry gaining momentum, bitcoin miners are increasingly turning their focus to AI-centric GPU hardware.
Enterprises such as Hive, Hut 8, and Iris Energy have been cited as embarking on similar AI-based ventures. Iris Energy disclosed in late August that it had spent $10 million for 248 Nvidia H100 units to expand its mining capabilities.
On September 21, Tether made a public statement about its investment, declaring its confidence that Northern Data is poised to become the most prominent independent AI entity in Europe.
Paolo Ardoino, Chief Technology Officer at Tether, stated, “We look forward to this financial commitment to Northern Data Group, as it marks a new phase in venturing into novel technological landscapes.”
Ardoino further elaborated, “This financial commitment reaffirms our dedication to sustainable growth and innovation, while maintaining the robustness and reliability of Tether’s token reserves.”
In light of the AI market’s buoyancy, Nvidia’s GPUs are witnessing soaring demand. The company expects to ship approximately 550,000 units this year. Certain reports indicate that individual GPUs have been sold for amounts exceeding $40,000 on eBay.
The pricing of these specialized GPUs varies, depending on packaging and bulk purchases. Nvidia has opted not to disclose the pricing details for its H100 SXM, H100 NVL, and GH200 Grace Hopper models to the public.
We invite you to share your insights and perspectives on Tether’s significant investment in the comments section below.
Frequently Asked Questions (FAQs) about Tether Nvidia investment
What is the significance of Tether’s $420 million investment in Nvidia GPUs?
Tether, the largest issuer of stablecoins by market capitalization, has made a substantial investment of $420 million in Nvidia H100 graphics processing units. This investment comes at a time of increasing demand in the artificial intelligence (AI) sector and indicates Tether’s strategic entry into this burgeoning market.
Who are the other stakeholders involved in this investment?
Northern Data, a Bitcoin mining enterprise, is a significant stakeholder. Tether’s $420 million investment was made in collaboration with Northern Data, and the agreement grants Tether a 20% ownership stake in the company.
How does this investment align with Tether’s overall business strategy?
Tether previously announced its venture into the Bitcoin mining industry and plans to hold Bitcoin on its balance sheet. The investment in Nvidia’s H100 GPUs represents an expansion into the technological sector, particularly AI, thereby diversifying its portfolio.
Are other companies also making similar investments in Nvidia GPUs?
Yes, companies involved in Bitcoin mining like Hive, Hut 8, and Iris Energy have also been investing in AI-centric Nvidia GPUs. For instance, Iris Energy reported its procurement of 248 Nvidia H100s in late August for $10 million.
What is Northern Data’s perspective on this partnership with Tether?
Northern Data’s CEO, Aroosh Thillainathan, stated that the partnership provides an excellent opportunity to secure a share of the limited GPU inventory available in the market. He also mentioned that the investment has promising potential, given the rising demand in the AI technology sector.
What does the soaring demand for Nvidia GPUs imply?
The increased demand for Nvidia GPUs, particularly the H100 models, indicates a robust and growing interest in artificial intelligence technologies. Nvidia anticipates shipping approximately 550,000 units this year, and some GPUs have reportedly been sold for more than $40,000 on eBay.
What does Tether hope to achieve with its investment in Northern Data?
Tether aims to secure a significant stake in what is expected to become Europe’s largest independent player in the AI market. By doing so, Tether not only diversifies its asset portfolio but also establishes itself as a key player in the rapidly growing AI industry.
More about Tether Nvidia investment
- Tether’s Official Announcement of Nvidia Investment
- Forbes Article on Tether’s Investment in Nvidia GPUs
- Northern Data Company Profile
- Iris Energy’s August Report on Nvidia Procurement
- Market Analysis on the Demand for Nvidia GPUs
- Tether’s Business Strategy Overview
- Nvidia’s Anticipated Shipments for 2023