In a strategic move indicative of the evolving landscape of technology and finance, Tether, the largest stablecoin issuer by market capitalization, has made a substantial investment of $420 million in 10,000 Nvidia H100 graphics processing units (GPUs). This significant development comes at a time of surging demand for artificial intelligence (AI) capabilities and follows Iris Energy’s acquisition of 248 Nvidia H100 GPUs for its bitcoin mining operation in August.
Tether’s High-Stakes Investment in Nvidia’s H100 GPUs
On September 20, 2023, Forbes staff contributor Iain Martin broke the news that Tether had allocated a portion of its capital towards acquiring AI-related GPUs. This move aligns with Tether’s recent entry into the bitcoin mining industry and its decision to hold Bitcoin on its balance sheet.
Martin’s report highlighted that Tether’s acquisition of 10,000 Nvidia H100 GPUs was executed through an agreement with the Bitcoin mining company Northern Data. This arrangement not only secures Tether a significant stake in Northern Data, amounting to 20% ownership, but also positions the stablecoin issuer at the forefront of the burgeoning AI systems market.
Northern Data’s CEO, Aroosh Thillainathan, acknowledged the lucrative potential of this venture, emphasizing that “investing in the growing AI systems market could be quite profitable.” He also noted the scarcity of GPUs in the current market, stating that the deal with Tether presented a unique opportunity to secure a portion of the sought-after GPU allocation.
The report suggests that the acquisition of GPUs was facilitated through an Irish company named Damoon. As part of the agreement, Northern Data will acquire a 70% stake in return for shares equivalent to 20% ownership. This strategic move mirrors a trend among Bitcoin miners who are increasingly exploring AI-related GPU hardware, captivated by the surge in AI demand.
Miners such as Hive, Hut 8, and Iris Energy have ventured into this arena, with Iris Energy announcing a $10 million investment in late August to acquire 248 Nvidia H100s for its expansion plans.
Tether’s Vision for the Future
Tether officially announced this significant investment on September 21, highlighting its belief in Northern Data’s potential to become the leading independent AI player in Europe. Paolo Ardoino, Tether’s Chief Technology Officer, expressed excitement about this venture into new technological horizons. He emphasized the commitment to responsible growth and innovation while preserving the strength and integrity of Tether tokens’ reserves.
The AI boom has triggered an unprecedented demand for Nvidia GPUs, with the company anticipating the shipment of 550,000 units this year. Reports have even surfaced of these GPUs fetching prices exceeding $40,000 on platforms like eBay. The fluctuating cost of these AI-centric GPUs is influenced by various factors, including packaging and quantity.
Nvidia’s H100 SXM, H100 NVL, and GH200 Grace Hopper models, integral to AI operations, are at the forefront of this demand-driven surge. Notably, Nvidia does not publicly list prices for these highly sought-after models.
In conclusion, Tether’s substantial investment in Nvidia GPUs represents a significant development at the intersection of cryptocurrencies, AI, and the evolving technology landscape. This strategic move positions Tether as a key player in the AI revolution, underscoring the transformative potential of such investments in the rapidly changing world of finance and technology. As AI continues to shape the future, Tether’s commitment to innovation and growth echoes the broader sentiment of exploration and adaptation in the crypto industry.