The digital asset mining company Hut 8, headquartered in Toronto, Canada, announced a strategic investment of $150 million from Coatue to collaborate on building the next generation of AI infrastructure platform.
Hut 8, listed on the Nasdaq, holds 9,366 bitcoins, accounting for 80% of its market value.
Hut 8 will accelerate the development of AI infrastructure. Coatue made a $150 million convertible note investment in Hut 8.
Hut 8 has two digital asset mining facilities and five high-performance computing data centers, providing support for traditional data center industries through cloud, hosting, and hosting services, while also providing 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, with investments including OpenSea, Dapper Labs, ByteDance, and Ant Financial.
Coatue founder Philippe Laffont stated, “We are committed to supporting innovators in advancing the development of artificial intelligence and believe that computing power is crucial for the significant growth of the entire ecosystem. We believe that Hut 8 is well positioned to accelerate new computing capabilities and take advantage of the opportunities it brings.”
Due to power shortages, long new capacity online cycles, and extensive upgrades required for existing data centers to support the latest generation of high-density computing, many traditional data center operators cannot meet the surging demand for AI computing capacity. Hut 8 believes 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’s strategic investment involves purchasing $150 million principal amount of 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 payable in cash or in kind. The notes will be 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 the company’s common stock at an initial conversion price of $16.395 per share (a premium of approximately 45%).
AI
Coatue
Hut 8