Bitcoin miner Bit Digital (BTBT) is entering the AI infrastructure sector to diversify its income stream. This will help the company expand its revenue.
Bit Digital launched a subsidiary on Monday to sell and lease equipment to AI firms that use HPC. Device deployment will occur at a third-party data center.
The protracted Crypto Batter winter is driving Bitcoin miners to AI and HPC businesses at an alarming pace. Since these activities demand the same skills as mining, they may swiftly build riches. Massive data centers need cooling, security, and inexpensive electricity.
- AI startup Bit Digital (BTBT) has inked a contract that may generate $250 million over three years.
- To service the AI customer, the miner promised to buy $35 million in GPUs and have adequate cash.
- The company expects the new entity to produce enough money for Bit Digital to continue mining and staking bitcoin and ether regardless of market direction.
Bit Digital (BTBT), a Bitcoin miner, is entering the AI infrastructure industry to diversify its earnings. This will help the company expand its revenue.
Bit Digital launched a subsidiary on Monday to sell and lease equipment to AI firms that use HPC. Device deployment will occur at a third-party data center.
The protracted crypto winter is driving Bitcoin miners to AI and HPC businesses at an alarming pace. Since these activities demand the same skills as mining, they may swiftly build riches. Massive data centers need cooling, security, and inexpensive electricity.
New York-based corporations’ customers use the service, according to the announcement. “Bit Digital has entered into a binding term sheet to provide cloud-based GPU resources to a customer with an initial contract duration spanning one to three years,” said the release.
The miner will lease 1,024 to 4,096 GPUs for the anonymous consumer. The contract concludes in January 2024, with $23 million in projected annual revenue and $27 million possibilities. According to the mining outfit, a three-year extension and the maximum GPUs may yield over $250 million in income.
Bit Digital earned $9 million in the second quarter and $32 million in 2022. Big Digital will pay $35 million for 132 FusionOne high-performance computing systems from xFusion Digital Technologies, a worldwide digital infrastructure and services company. This will make the purchase more practical. Nvidia’s HGX H100 8-GPUs will be among 1,056 GPUs distributed by year’s end.
Bit Digital will fund the transaction with cash, balance sheet digital assets, a new stock offering, and perhaps equipment financing. The company’s financial statement showed $50.7 million in digital assets and $20.8 million in cash on September 30th.
Substantially higher margins
The contract should provide “substantially higher margins” for Bit Digital than its bitcoin mining and ether staking activities, the firm says. This may diversify the firm’s income. AI and HPC outperform mining in profit margins. Thus, Bit Digital believes its AI segment can create enough money to fund its primary activities. That’s true regardless of Bitcoin’s price or the halving’s impact on mining incentives.
“This business line aims to provide a non-correlated income stream that will help the Company weather potential downturns in its core bitcoin mining and ETH staking businesses,” CEO Sam Tabar said.
This company’s industry is more significant. Hive Digital (HIVE), a cryptocurrency miner, is transforming 38,000 Nvidia GPU cards used to mine Ethereum and other cryptocurrencies into a GPU cloud service that consumers may utilize whenever they need them. The miner claims its artificial intelligence and high-performance computing sector earns 15 times more per kilowatt than Bitcoin mining.
Conclusion
Bit Digital’s entrance into AI infrastructure diverges from its efforts to diversify beyond Bitcoin mining and Ethereum staking. The company’s investment in HPC for artificial intelligence corresponds with bitcoin miners’ need for new revenue streams during the crypto winter.
Bit Digital has partnered with an AI company that might generate $250 million over three years to illustrate its market adaptability. Bit Digital’s financial planning prepares the company to prosper in the future, emphasizing the need to be resilient and profitable despite market instability.
