Coatue Management to Invest $150M in Bitcoin Miner Hut 8 Amid Rising AI Interests
Summary:
Coatue Management, a tech-centered investment firm, is set to invest $150 million in Bitcoin mining company, Hut 8 Corp., highlighting growing interest in artificial intelligence (AI). The fund, owned by billionaire Philippe Laffont, will carry out the investment through a convertible note. Marketed as a strong investment owing to Hut 8's prime position in new compute capacity and significant growth in the AI sector, this investment asserts Coatue's commitment to supporting industry innovators. The completion of this financial transaction is slated for on or before July 11. Hut 8, one of the largest miners by computing power, was an early entrant into high-performance computing in the crypto industry.
In a strategic move directed at the technology sector, Coatue Management are planning to plough $150 million into Bitcoin mining company, Hut 8 Corp. This move reflects the growing confidence in the future of artificial intelligence (AI). Hut 8 Corp revealed the significant financial endorsement from Coatue Management, under the ownership of billionaire Philippe Laffont, on June 24, stating the funding will come via a convertible note.
As the details of the note confirm, an annual return of 8% is expected, across an initial five-year period, with the option to prolong the note for a further one, two or three years. This investment will be considered a chief unsecured obligation of Coatue Management. Assessing the potential of the Bitcoin miner to enhance new compute capacity, and fully exploit associated opportunities, Laffont expressed confidence in investing in such a 'well-positioned' business.
With a firm belief in supporting the trailblazers of AI, he emphasises that compute capacity is inherently key for facilitating significant growth across the ecosystem. The financial transaction is expected to reach its completion on or before July 11, this year. Hut 8 submitted the investment documentation concerning Coatue to the United States Securities and Exchange Commission (SEC) on June 21.
With a current market capitalization value of $1.1 billion, Hut 8 commands its place as one of the largest public miners based on the available computing power. Hut 8 pioneered the venture into the business of high-performance computing in the crypto industry, setting a trend now endorsed by others seeking to power generative AI models and applications.
Other names in the crypto industry such as Core Scientific and Terawolf have also dabbled in hosting data centers or forging alliances with AI companies. The result of these AI-centred deals has seen a surge in their respective stock prices. Coatue partner Robert Yin stated that the wider market is now recognising the premium value of high-quality power assets, attributing to Hut 8 a "deep pipeline" of highly coveted and expandable assets.
Hut 8 was approached by Cointelegraph for additional insight into the investment. In the aftermath of the Bitcoin (BTC) halving in April, mining firms have been scouting for ways to stay competitive amidst challenges to profitability. Subsequently Hut 8 has disclosed its plans for expanding its self-mining operations and diversifying its revenue streams. Moreover, the SEC has recently withdrawn its Ether probe although it still pursues penalties amounting to billions from Ripple.
Published At
6/24/2024 4:22:35 PM
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