HIVE Digital Technologies Signs $350 Million AI Deal Requiring $185 Million Infrastructure Buildout

HIVE Secures Major Cloud Contract for AI Services

HIVE Digital Technologies has signed a five-year agreement worth $350 million to provide artificial intelligence (AI) cloud services through its BUZZ High Performance Computing unit. HIVE is a Bitcoin miner, a company that typically uses powerful computers to secure the Bitcoin blockchain, which is a shared digital ledger of transactions.

To fulfill this new contract, HIVE must complete a $185 million infrastructure expansion at its facility in Merritt, British Columbia. Most of the contract's revenue will not begin until this buildout is finished and the hardware is operational.

Details of the Five-Year Agreement

• The contract is with an unnamed enterprise customer described as having an investment-grade credit rating.
• HIVE plans to install 2,016 Nvidia Blackwell Ultra GPUs (Graphics Processing Units), which are specialized chips used for complex AI calculations.
• The hardware deployment is targeted for completion in the fourth quarter of 2026.
• The customer has agreed to an upfront deposit of approximately $35 million, representing 10% of the total contract value.

Projected Financial Impact for HIVE

Once the new infrastructure is deployed, the deal is expected to generate approximately $70 million in annualized revenue. This would bring the company's total projected annual recurring revenue for its AI business to roughly $180 million. Currently, only about $35 million of that total revenue is active, with the remaining $145 million depending on the successful setup of the new hardware.

To fund the purchase of the Nvidia GPUs and other equipment, HIVE is relying on several financing sources. The company recently raised $130 million and another $245 million through zero-percent exchangeable senior notes, which are a type of debt that can later be turned into company shares.

Uncertainties Regarding Execution and Funding

While the contract is signed, several factors remain unconfirmed. HIVE has not disclosed whether it has officially received the $35 million deposit from the customer. Additionally, while the company reported having $208 million in cash, it is unclear how much of that is specifically set aside for this GPU deployment.

The company also noted that its revenue projections are based on current estimates and may change due to potential future cancellations, discounts, or reductions in service.

Expanding Beyond Bitcoin Mining

This move highlights a shift for HIVE as it diversifies its business beyond mining digital assets. By investing in high-performance computing (HPC) and AI, the company aims to create a more consistent revenue stream. Once the new systems are running, HIVE expects its computing and AI division to generate about $500,000 in daily revenue.

Sources

• CryptoSlate