Hut 8 plans to tap the project finance market for AI and Bitcoin mining data center projects in the near term.

The company, a publicly traded energy infrastructure firm, will also seek to utilize a growing base of institutional equity investors and its own balance sheet to finance and commercialize 400 MW of projects as soon as this year, CEO Asher Genoot said in an interview with NPM.

He added that the firm has a pipeline of approximately 5 GW of projects in North America under diligence, of which 1.5 GW is at the exclusivity stage as of October, but that the pipeline has accelerated and changes weekly.

The 400 MW that are ready for commercialization will require “a couple billion dollars,” and the company is actively working with advisors to raise capital for those projects. Genoot declined to name the advisors but said they are a mix of bulge bracket banks along with domain experts.

Miami-based Hut 8 has grown its institutional shareholder base from under 10% in February 2024 – when Genoot took over as CEO – to over 50% now, he said, “and many of those investors want to continue to support and invest in the company, especially as we develop our data center thesis.”

The company also has over USD 1bn of cash and Bitcoin on its balance sheet, he added. Hut 8 equity trades at USD 26.84 per share and a USD 2.68bn market cap. Its three largest shareholders are BlackRock, Vanguard, and State Street.

“ I think that’s, from a customer perspective, really nice because they look at our balance sheet and they say, ‘Look, you don’t even need to raise money, you can go and do this off-balance sheet if you wanted to, in terms of bringing these projects to fruition.’”

Genoot said that debt financing would make up 70% of project construction costs, “plus or minus 10%.”

In a business update issued earlier this month, Hut 8 lists 15 projects owned solely or through JVs, including the 205 MW Vega project, which is under construction in the Texas Panhandle and will support Bitcoin mining.

The company also recently received approvals from a local planning and zoning commission in Louisiana for a 300 MW Tier III data center for AI, with future capacity for expansion beyond 1,000 MW. It will connect to Entergy Louisiana’s transmission network.

The initial phase is expected to require a USD 2.5bn investment for the data center development, with an additional USD 10bn brought in by the eventual tenant for computation, according to local news reports.

Bitcoin to AI

Hut 8 splits its business into three categories: power and power infrastructure, digital infrastructure including data centers, and compute, whether GPUs or ASICs for Bitcoin mining.

AI data centers are significantly more expensive to build than Bitcoin mining facilities, with construction costs averaging USD 10m per megawatt compared to under USD 400,000 per megawatt for Bitcoin mining, according to Genoot. The higher cost for AI data centers stems from the need for advanced cooling systems, extensive redundancy measures, and enterprise-grade infrastructure to support high-density GPUs.

Additionally, GPU racks for AI workloads can cost upwards of USD 30m while ASIC racks for Bitcoin mining are around USD 1m. Bitcoin mining facilities require simpler air-cooling systems and minimal redundancy, making them less expensive and quicker to deploy.

Genoot noted that Hut 8 views Bitcoin mining facilities as a low-cost way to secure large-scale power capacity. This capacity can later be transitioned to higher-value use cases, such as AI or HPC, by retrofitting or upgrading facilities with more advanced infrastructure.

He also said that Hut 8 is able to build the Vega facility at USD 400,000 per megawatt because the company is pursuing its own designs that will drive down costs.

“ People ask the question, Are you a Bitcoin mining company? Are you a data center company? And my answer to that is we’re an energy infrastructure company,” he said. “Obviously AI today has a lot more creditworthy counterparties and less volatility in those revenue profiles. But ultimately our job is: how do we monetize and maximize the value of all the megawatts that we have today and in the long term. And so, for the long term, you’ll see us at the intersection of a lot of these technologies because that is the focal point of the business.”

The Texas and Louisiana projects underscore the different types of power grids and load profiles utilized by Hut 8, and its ability to select locations that support distinct technologies, Genoot said, “but also in a way that helps strengthen the grid.”

For example, power pricing volatility in the Texas Panhandle due to high renewables penetration allows for the placement of an ASIC load for Bitcoin mining that can be curtailed around price signals.

Conversely, AI data centers are not taking price signals but instead require stable generation. “ And so, for an area like a regulated market, like Entergy Louisiana, that’s helpful for them as they model out their demand and their supply within the region and they’re looking for more stable load profiles,” he said.

*This story was originally published exclusively for NPM subscribers.

NPM US (New Project Media) is a leading data, intelligence and events company dedicated to providing business development led coverage of the renewable energy market for the development, finance, advisory & corporate community.