There is a growing trend of digital assets companies jumping onto the AI bandwagon.

Tether, the company known for the world’s leading stablecoin, has made a strategic investment in Northern Data Group (ETR: NB2) through its subsidiary, Damoon. With an $83 billion market capitalization, Tether is diversifying its investments beyond fintech, including energy production, bitcoin mining, and communications technology.

Northern Data Group, a German-listed Bitcoin miner, is at the forefront of technological advancements, such as blockchain and Generative AI. Tether views the company as pioneer and shares its commitment to resilient data storage and high-performance computing. (Tether)

According to the announcement, the two companies will collaborate on initiatives involving AI, peer-to-peer communications, and super-resilient data storage to serve various communities already engaged with Tether products.

“A media report from Forbes contained inaccuracies regarding Tether’s stake size in this investment,” Tether alleged. “These investments are separate from Tether’s reserves disclosed in the CRR, ensuring they do not impact Tether’s reserves or customer funds.”

In an article published September 20, Forbes said Tether had made a substantial investment of $420 million in 10,000 Nvidia (NASDAQ: NVDA) H100 graphics processing units (GPUs) via a deal with Northern Data. According to Forbes, Tether is set to acquire the GPUs via the Irish shell company Damoon, and in exchange, Northern Data will receive a 70% ownership stake represented by shares equivalent to 20% of Damoon’s ownership.

Northern Data, which is currently valued at $570 million (€530 million) in the stock market, holds an option to purchase the remaining portion of the shell company. The exact cost of this potential acquisition remains undisclosed, however.

According to Forbes, Northern Data plans to rent its cache of chips to AI startups through a cloud-based operation. This development coincides with a significant upswing in the demand for artificial intelligence (AI) and the chips that run AI.

Notably, crypto mining companies such as Hive, Crusoe, and Hut 8 have transformed the use case for GPUs that had become obsolete for Ethereum mining following the cryptocurrency’s energy-saving changes in September 2022. Now, they are offering these GPUs for rent on an hourly basis to startups in need of computing power.

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