Northern Data Plans Sale of Crypto-Mining Unit

(Bloomberg) -- Northern Data is examining a possible sale of its crypto-mining business to free up funds for expanding its artificial intelligence operations. 

The Frankfurt-listed company, whose main shareholder is stablecoin issuer Tether Holdings, would use proceeds from the sale of Peak Mining to focus on its AI solutions unit, it said in a statement Monday. Shares of Northern Data jumped as much as 12% on the news.

Pulling off a divestment partially depends on the “current dynamic market environment” for cryptocurrencies, the company said. The price of Bitcoin is up more than 60% so far this year, and is inching towards the peak of $73,798 it hit in March.

Bitcoin miners have been stuck at a fork in the road since April, when the blockchain network that underpins the cryptocurrency completed a software update that halved their main source of revenue. Some companies have pivoted to using the high-performance computing tech required to mine Bitcoin for powering AI instead. 

Northern Data would use proceeds from the sale to fund its AI solutions business, which includes its generative artificial intelligence cloud platform that helps businesses to launch their own AI-powered applications. It would also invest in buying and developing more data centers, as well as additional hardware. 

Related:Bitcoin Miners Pivot to Data Center Operations Amid AI Boom

Tether, which began buying shares in Northern Data over a year ago, operates its own Bitcoin mining business across sites in El Salvador and Uruguay. It owned around 46% of Northern Data as of February, according to data compiled by Bloomberg.

Northern Data said in July that it expects full-year revenue to triple in 2024, supported by surging demand for AI compute. The company has been weighing a US listing of its combined AI cloud computing and data center businesses at a valuation of up to $16 billion.