Akron Energy raises $110 million to expand Bitcoin mining infrastructure

The infrastructure-focused mining company Akron Energy has raised $110 million to expand the capacity of its data centres, mainly for Bitcoin mining. TechCrunch reports.

The round was led by Bluesky Capital Management, with participants including Kestrel 0x1 and Nural Capital.

Akron Energy began operations in 2021 in Australia with a 5 MW facility. Since then, capacity has grown to 130 MW, and its footprint has expanded to the United States and Europe.

“These facilities attract both Bitcoin miners and clients from the fields of artificial intelligence or machine learning, which require high computing power,” said the company’s CEO Josh Payne.

The company will devote about $80 million of the raised funds to secure an additional 200 MW of power capacity for new data centres in Ohio, North Carolina and Texas.

This will augment the existing 100 MW facility in Ohio that Akron Energy bought in June.

Low electricity tariffs draw Akron Energy in the United States, while American miners seek them abroad

According to Payne, the United States is an attractive market for the firm largely due to strong demand and political and regulatory stability. A large share of Akron Energy’s domestic clients are institutional-level Bitcoin miners. This is helped by the availability of “some of the cheapest sources of electricity in the world,” the firm’s head said.

Although the United States leads among countries by share of Bitcoin’s hashrate, not all miners would agree with Payne’s claim.

In October, the American mining infrastructure provider Sazmining launched a data centre in Paraguay, powered by the Itaipu hydroelectric dam. Announcing the construction of the facility, the company stressed that local tariffs allow reducing the cost of hosting equipment versus the United States by about three times. The first facility was launched in January at a hydroelectric plant in Wisconsin.

In November, Marathon Digital Holdings, the largest American public miner by market capitalization and hash rate, announced the opening of a data centre in Paraguay. The nine-asset Bitcoin mining company did not comment on the motives but announced expansion to 20 MW in the country in 2024.

Earlier, Luxor analysts noted the prospects for mining in Paraguay. According to them, electricity prices in the country are lower than in the US states popular with miners, but lag those of neighbouring Argentina.

In March, Canadian company Bitfarms began expanding its mining data centre in this jurisdiction to a capacity of 100 MW. The facility in Rio Cuarto the company began building in 2021.

Bitfarms also operates two mining facilities in Paraguay, eight in Canada, and another — in the United States. But, according to CEO Jeff Morphy, the contracted electricity tariff in Argentina ($0.03 per kWh) is the lowest in the firm’s portfolio.

The Russian industrial miner BitCluster, in January 2024 will launch a 120 MW data centre in Ethiopia for Bitcoin mining.

According to Luxor analysts, the country has excess capacities from numerous hydropower plants with relatively low demand. Electricity costs $0.022 per kWh. Analysts note that a similar pattern is seen in several African countries, and in the coming decade the continent could become the main global hub for hash rate growth.

AI has become one of miners’ diversification avenues

About $30 million of the funds Akron Energy has raised will be used to develop a cloud AI service project at a data centre in Norway. According to the head of the firm, there has been a sharp rise in demand for generative AI and applications for training language models over the last year.

A number of Bitcoin miners have also used this direction to expand beyond cryptocurrency mining. Canadian Hut 8 has redirected GPU capacity freed after the Ethereum transition to a Proof-of-Stake algorithm.

The infrastructure provider and miner Northern Data said it would spend the bulk of €575 million in credit financing from Tether on expanding its Taiga Cloud unit, serving the AI space.

Cyber.Fund announced that it would allocate $100 million to support projects at the intersection of blockchain and AI, as well as robotics and IoT.