Stablecoin company Tether is making a move into artificial intelligence chips and overseas Bitcoin crypto mining through a $420 million deal, according to Forbes’ report on September 20.
While Tether has yet to officially announce the investment, Forbes gathered information from Northern Data and its executives.
In this reported deal, Tether spent $420 million on 100,000 Nvidia H100 GPUs, accounting for roughly 2% of the 550,000 GPUs Nvidia plans to ship this year.
Tether made this purchase on behalf of Northern Data, a German cryptocurrency mining firm. Northern Data aims to lease cloud access to these specialized chips to AI startups. In exchange, Tether will acquire a 20% stake in Northern Data.
However, Tether didn’t directly make the purchase itself. Instead, it orchestrated the deal and GPU acquisition through an Irish shell company called Damoon, owned by Northern Data.
Northern Data will take a 70% stake in Damoon, as previously hinted at in July. Forbes reports that Northern Data might acquire the remaining stake in Damoon, though the cost of a complete acquisition remains undisclosed.
Northern Data CEO Aroosh Thillainathan explained that his company couldn’t buy these chips directly from Nvidia because of the rapid depletion of chip availability at the manufacturer. Consequently, Tether stepped in to procure the necessary chips.
The report by Forbes also mentions various controversies surrounding Northern Data. The company has previously used shell companies to purchase hardware, missed certain financial reports, and faced a criminal complaint from German regulators over inaccurate revenue reporting. The latter case was closed without further action.