Tether bets $420m on Nvidia GPUs

The issuer USDT, Tether Limited, spent $420m on acquiring 10,000 Nvidia H100 chips. The GPUs will be the payment for 20% stake in the mining company Northern Data, which will lease them to AI startups, according to Forbes.

Tether will become a shareholder through the Ireland-registered firm Damoon. Northern Trust will own 70% of it, with an option to buy the remaining 30%. Financial terms were not disclosed.

Aruš Tillainatan, the CEO of Northern Data, explained that Tether had the money and managed to snap up the chips.

Forbes noted that the mining company had previously resorted to schemes for purchasing equipment through offshore structures, and the regulator had questions about the quality of its financial reporting.

The publication noted that the $40,000 chip had sparked a pitched industry battle amid the AI hype.

Northern Data has followed in the footsteps of companies such as Coreweave, Hive, Crusoe and Hut 8, which after the transition of Ethereum to Proof-of-Stake redirected hardware from mining the second-largest cryptocurrency by market capitalization into a new direction.

“A number of new specialized cloud-service providers have emerged,” —said Nvidia CEO Jensen Huang.

As a result of the deal with Tether, Northern Data will receive ~2% of the expected H100 supply volume this year, making it the largest operator in Europe after Amazon, Microsoft and Oracle.

The 10,000 chips will surpass Saudi Arabia’s purchases (3,000 chips) and the United Kingdom’s (for these purposes £100m).

Earlier, Tether reported net income of $850m in the second quarter. According to the document, 85% of USDT collateral consists of cash and cash equivalents.

Earlier in May, CTO Paolo Ardoino said that high profitability of the issuer allows considering new lines of business.

Subsequently, it emerged that Tether invested $1bn in a Bitcoin mining project in El Salvador.