Galaxy Secures $460 Million for AI Sector Expansion

Galaxy Digital secures $460 million for AI sector expansion.

Galaxy Digital has secured a strategic investment of $460 million through a share sale.

The deal is set to close in mid-October.

According to the press release, the investor is described as “one of the largest and most respected asset management firms.”

Galaxy intends to use the funds for “general corporate purposes” and to transform the former Helios mining data center into a facility serving the AI sector.

Under the terms of a 15-year lease agreement with CoreWeave, the company must provide 133 MW of critical IT load by the first quarter of 2026. The total contracted capacity for AI computing services could reach approximately 393 MW.

At the end of 2022, Galaxy acquired Helios for $65 million from the financially troubled Argo Blockchain. According to the company, the installed capacity of the data center is 800 MW, with the potential to expand by an additional 1.7 GW. The firm is exploring ways to enhance the facility’s capabilities in light of infrastructure developments for AI services.

Bitcoin miners have emerged as unexpected beneficiaries of the surging demand for AI computing infrastructure. This conclusion was reached by Bernstein analysts, reports The Block.

Miners’ advantage lies in their guaranteed access to energy resources. Experts estimate this has made industry companies critical partners for AI infrastructure service providers, allowing them to reduce data center deployment time by 75%. For new projects, network connection can take several years.

“Access to the grid has become an extremely scarce resource in the US,” Bernstein noted.

As an example, analysts cited IREN, with operational or developing capacities of about 3 GW. The company expanded its fleet of NVIDIA Blackwell model GPUs to 23,300 units. It is expected that in the first quarter, the firm’s annual revenue from cloud AI computing will reach $500 million.

Galaxy plans to earn up to $1 billion annually through its contract with CoreWeave. However, unlike Novogratz’s company, IREN maintains a strong position in mining, with a Bitcoin hash rate of about 50 EH/s.

Bernstein noted that about half of IREN’s revenue is already generated by its AI solutions.

In August, the cloud AI platform Fluidstack expanded its use of the TeraWulf Bitcoin miner data center under Google’s financial guarantees amounting to $3.2 billion.

In September, the tech giant helped Fluidstack secure a lease agreement with another cryptocurrency miner, Cipher Mining.