Hut 8 receives $150 million investment to accelerate the development of AI infrastructure platform.

The digital asset mining company Hut 8, based in Toronto, Canada, announced a strategic investment of $150 million from Coatue to partner in building the next generation AI infrastructure platform.

Hut 8 is listed on the Nasdaq and holds 9,366 bitcoins, accounting for 80% of its market value.

Hut 8 to Accelerate Development of AI Infrastructure

Hut 8 operates two digital asset mining facilities and five high-performance computing data centers, providing support for traditional data center industries through cloud, hosting, and colocation services, while also serving emerging next-generation technologies, including AI, machine learning, visual effects rendering, and Bitcoin mining.

Coatue, a technology-focused investment management firm based in the United States, founded in 1999, has invested in companies such as OpenSea, Dapper Labs, ByteDance, and Ant Group, among others.

Coatue founder Philippe Laffont stated:

We are committed to supporting innovators driving the advancement of artificial intelligence and believe that computational power is crucial for significant growth across the entire ecosystem. We believe that Hut 8 is well-positioned to accelerate new computing power and leverage the opportunities it will bring.

Due to power shortages, long new capacity onboarding cycles, and extensive upgrades required for existing data centers to support the latest generation of high-density computing for artificial intelligence operations, many traditional data center operators are unable to meet the surging demand for AI computing capacity. Hut 8 believes that it can leverage its expertise in developing and operating complex energy infrastructure to address the underserved demand and become a leader in the AI infrastructure market.

Coatue Invests $150 Million in Convertible Notes in Hut 8

Coatue has partnered with Hut 8 in a strategic investment and agreed to purchase $150 million principal amount of convertible notes with an 8% annual interest rate. The initial term of the notes is five years, with the option for Hut 8 to extend for an additional year, with three extension opportunities in total. The interest on the notes will be payable in cash or in kind. The notes will rank as senior unsecured obligations of the company and will be guaranteed by the company's wholly-owned subsidiary, Hut 8 Mining Corp.

Coatue will have the option to convert the notes into common shares of the company, with an initial conversion price of $16.395 per common share, representing a premium of approximately 45%.