Luxor Technology raises $16 million to build an AI hardware brokerage and compute-trading business

Bitcoin-mining services firm Luxor raises $16 million for AI hardware brokerage and compute trading

Luxor Technology, best known for its bitcoin mining services, has raised $16 million to expand its artificial intelligence hardware brokerage and computing-power trading business. The Seattle-based company announced the raise on Tuesday. The round was led by CMT Digital, with bitcoin mining equipment makers Canaan and MicroBT also investing.

Luxor said the money will go toward its AI hardware brokerage and computing-power trading business. The raise included both new investment and sales of existing shares, although the company did not disclose how much of the funding was new capital invested directly into the company.

Bitcoin miners are moving into AI contracts

Bitcoin mining companies are increasingly turning to artificial intelligence, renting out computing power and converting mining facilities into data centers. Luxor is one of the companies that built its business serving bitcoin miners and is now following them into the AI market.

According to CoinShares data, publicly traded bitcoin miners had signed more than $70 billion worth of AI and high-performance computing contracts by the end of March.

What Luxor found about existing mining sites

Ethan Vera, Luxor's chief operating officer, said the company's software business works with bitcoin miners representing nearly two gigawatts of power capacity. After assessing more than half of that capacity, Luxor found that most sites had adequate electricity and fiber connections for AI workloads but would require new data centers.

Contracts to lock in future computing prices

Luxor is also expanding into contracts that let buyers and sellers agree on future computing prices. This is similar to how bitcoin miners use financial contracts to manage changes in mining revenue. Sam Hallene, a partner at CMT Digital, said AI companies have different reasons to protect themselves, though the article did not spell out those reasons in full.

Not every miner is leaving bitcoin mining. Nasdaq-listed NIP Group announced plans to increase its mining capacity by about 48%, and said it expects to generate about 195 bitcoin a month at full deployment.

Confirmed and still unclear

• Confirmed: Luxor Technology raised $16 million, led by CMT Digital, with Canaan and MicroBT also investing.


• Confirmed: The funding will support its AI hardware brokerage and computing-power trading business.


• Confirmed: Publicly traded bitcoin miners had signed more than $70 billion in AI and high-performance computing contracts by the end of March, per CoinShares data.


• Confirmed: Luxor assessed more than one gigawatt of the nearly two gigawatts of capacity it works with, finding most sites have enough electricity and fiber but need new data centers.


• Still unclear: Exactly how much of the $16 million was new capital versus sales of existing shares.


• Still unclear: The specific reasons Sam Hallene gave for why AI companies want to protect themselves against price changes.

Source

• CoinDesk — Luxor raised $16 million to expand into AI hardware and trading, betting that computing power will become a market where companies can hedge costs and prices