Bitcoin mining company Hut 8 announced on Wednesday that it has leased a $7 billion AI data center from cloud infrastructure provider Fluidstack, reflecting the growing trend of crypto miners investing in AI infrastructure.
Following the announcement, Hut 8's stock surged significantly, ending a long period of stock price volatility and reflecting renewed investor interest.
A deep dive into Hut 8's significant AI lease in Canada
The agreement covers 245 megawatts of AI processing power at Hut 8's River Bend facility in Louisiana under a 15-year lease agreement.
Additionally, there are options to extend the lease for three additional five-year terms, which could bring the total contract value to approximately $17.7 billion over the entire contract duration. This agreement also allows Fluidstack, the infrastructure provider, to lease an additional 1,000 megawatts when expanding additional facilities.
In addition to this initial lease, the agreement is part of a broader collaboration between Hut 8 and AI developer Anthropic, which could scale up to 2.3 gigawatts in the future.
Google, a subsidiary of Alphabet, has provided financial support for the initial lease term, highlighting the urgency among major cloud providers to secure long-term energy for energy-intensive AI workloads.
Hut 8 predicts that this project will generate approximately $6.9 billion in net operating income during the initial lease term.
Investors responded positively, with Hut 8's stock rising approximately 20% in pre-market trading following the announcement of the agreement.
This operation indicates the company's efforts to create business stability while also reflecting the broader trend of Bitcoin miners prioritizing AI processing for long-term survival.
Bitcoin mining faces a major restructuring
Throughout the past year, the Bitcoin mining business has become a more complex and challenging business, with increasing network difficulties, periodic hash rate increases, rising energy costs, and the post-halving environment all contributing to ongoing profit shrinkage.
As a result, many publicly traded companies focused solely on Bitcoin mining are struggling to generate consistent profits or clear growth strategies. Thus, many companies are beginning to diversify their operations beyond just Bitcoin mining.
Meanwhile, the rapid expansion of artificial intelligence has driven a substantial increase in demand for processing power, as Bitcoin miners already control large energy sources and industrial-grade infrastructure, making the shift to AI data centers a practical and increasingly necessary strategy.
Hut 8 recognizes this broader context, especially as its own stock faced stabilization efforts in recent weeks when Bitcoin prices increased in volatility.
