The transaction was necessitated by a chip scarcity that prevented Northern Data from directly securing the GPUs, which are highly sought after for their data processing capabilities essential in AI applications. Nvidia’s GPUs are widely used in data centers and cloud computing applications, contributing to the company’s market capitalization exceeding $1 trillion.
This move aligns with an ongoing trend among Bitcoin mining companies diversifying their revenue streams by venturing into the burgeoning AI industry. Companies like Coreweave have successfully transitioned from crypto mining to providing GPU-specialized cloud services, as acknowledged by Nvidia CEO Jensen Huang.
The deal could potentially position Northern Data as one of Europe’s largest cloud GPU operators, rivaling cloud computing giants such as Amazon (NASDAQ:AMZN), Oracle (NYSE:ORCL), and Microsoft (NASDAQ:MSFT). The company plans to rent out the GPUs to AI startups.
Despite the strategic investment, both Tether and Northern Data have faced controversies in the past. In 2022, Tether incurred a $21 million fine for misleading claims about its financials. On the other hand, Northern Data faced challenges with timely financial reporting and even had a criminal complaint filed by German regulators over inaccurate revenue reports.
Nevertheless, both companies continue to make significant strides in their respective sectors. Tether recently reported over $1 billion in profits for the last quarter and announced a $115 million share buyback. Meanwhile, Northern Data continues its pivot towards AI technology through this partnership with Tether.
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Source: Cryptocurrency - investing.com
