Hut 8 Secures 150 Million Investment to Accelerate Construction of AI Infrastructure Platform
Hut 8, a digital asset mining company based in Toronto, Canada, has announced a strategic investment of $150 million from Coatue to collaborate on building the next generation of AI infrastructure platform.
Hut 8, listed on Nasdaq and holding 9,366 bitcoins, accounting for 80% of its market value, owns two digital asset mining facilities and five high-performance computing data centers. It provides support for traditional data center industries through cloud, hosting, and colocation services, as well as services for emerging next-generation technologies, including AI, machine learning, visual effects rendering, and bitcoin mining.
Coatue is a US-based technology-focused investment management company founded in 1999. Its investment targets include OpenSea, Dapper Labs, ByteDance, and Ant Group.
Philippe Laffont, the founder of Coatue, stated: “We are committed to supporting innovators in advancing the development of AI and believe that computing power is crucial for the significant growth of the entire ecosystem. We believe Hut 8 is well-positioned to accelerate new computing capabilities and capitalize on the opportunities it will bring.”
Due to power shortages, long new capacity deployment cycles, and extensive upgrades required for existing data center support of next-generation high-density computing, many traditional data center operators are unable to meet the increasing demand for AI computing capacity. Hut 8 believes that it can use its expertise in developing and operating complex energy infrastructure to address unmet needs and become a leader in the AI infrastructure market.
Coatue is collaborating with Hut 8 through a strategic investment and has agreed to purchase $150 million in convertible notes with an 8% annual interest rate. The initial term of the notes is five years, with three opportunities for extension. The interest on the notes will be paid in cash or in kind. The notes will be senior unsecured debt of the company and will be guaranteed by Hut 8’s wholly-owned subsidiary, Hut 8 Mining Corp.
Coatue will have the right to convert the notes into the company’s common stock, with the initial conversion price of $16.395 per share (approximately 45% premium).
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