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Northern Data AG, a German firm focused on infrastructure for cryptocurrency and artificial intelligence, revealed on Monday that it is considering the sale of its Peak Mining division to redirect resources towards enhancing its artificial intelligence initiatives.
In the wake of this announcement, Northern Data’s stock experienced a rise of up to 12%, ultimately stabilizing at a 9.8% increase by 12:06 p.m. in Frankfurt.
Northern Data’s Strategic Shift: Divesting Peak Mining to Support AI Goals?
The company indicated that the viability of the sale is closely tied to the “current dynamic market environment” surrounding cryptocurrencies.
Bitcoin prices have increased by over 60% this year, nearing the all-time high of $73,798 recorded in March.
TETHER-BACKED NORTHERN DATA EYES PEAK MINING SALE
Northern Data AG, supported by Tether, is poised to divest its Peak Mining unit to fully commit to AI initiatives.
They aim to establish themselves as Europe’s leading Generative AI cloud platform.
Plans are in place to reinvest the proceeds from the sale into next-gen… pic.twitter.com/78lExqirRr— Mario Nawfal’s Roundtable (@RoundtableSpace) October 21, 2024
This increase in value arrives at a pivotal moment, as Bitcoin miners have encountered difficulties since the Bitcoin halving in April, which reduced their primary revenue source.
In light of these challenges, several mining firms, including Northern Data, have redirected their high-performance computing capabilities towards artificial intelligence.
The divestiture of Peak Mining would generate crucial funds to enhance Northern Data’s AI solutions division, which includes a generative AI cloud platform that aids businesses in launching AI-driven applications.
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“Mining is a foundational part of Northern Data’s heritage and growth story. We remain supporters of blockchain technology and continue to believe in its potential,” stated Aroosh Thillainathan, CEO and founder of Northern Data.
The company intends to improve its Dynamic Enablement Services by introducing new software functionalities and managed services to address the changing needs of the AI sector.
Moreover, Northern Data will focus on investments in data center acquisitions and the procurement of advanced AI GPUs to enhance its infrastructure.
Northern Data Shares Rise 10.69% Following Strong Q2 Results
After recent announcements, Northern Data shares increased by 10.69% on the Frankfurt Stock Exchange, reaching €35.20.
This growth follows a robust Q2 performance, with the company reporting a 22% rise in revenue, amounting to €26 million.
The increase is attributed to significant activity in its cloud platform and investments in data centers and mining operations, despite the challenges posed by the recent Bitcoin halving.
In September 2023, Tether announced a partnership with Northern Data, concentrating on artificial intelligence (AI), peer-to-peer communications, and data storage solutions.
While Tether denied allegations of a $420 million investment for 10,000 H100 GPUs from Northern Data, it has been acquiring shares in the company for over a year. Reports from the Financial Times suggest that Tether is the majority shareholder of Northern Data, holding 51% of the stock.
Northern Data anticipates a tripling of its full-year revenue in 2024, driven by heightened demand for AI computing services. The company is also considering a U.S. listing for its AI cloud computing and data center operations, with a potential valuation of up to $16 billion.
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