- Hut 8 secured a 15-year, 7B AI data center lease
- Google provides financial backing for the agreement
- Bitcoin mining infrastructure is shifting toward AI computing
One of the biggest AI infrastructure deals that has ever been signed by a Bitcoin mining company is achieved by Hut 8. The Hut 8 AI yearly lease of a data center is 15 years, and the total value of this lease is approximately $7 billion, and it is a significant strategic move towards artificial intelligence computing. The agreement underscores the manner in which crypto miners are repurposing assets that consume a lot of power to meet the increased AI demands.
In the Hut 8 deal, Hut 8 will provide AI data center capacity on a large scale in its River Bend campus in Louisiana. The lease enhances trust in the company business concept since Bitcoin mining margins are under pressure.
Hut 8 AI data center lease signifies strategic change
The Hut 8 lease is for an AI data center and signed with the Fluidstack AI infrastructure company and is 245 megawatts of IT capacity. The rent provided under the agreement rises by 3% per year, and this offers long-term revenue that is predictable. Fluidstack also has an opportunity to increase the lease up to 1,000 megawatts as the River Bend campus becomes larger.
Google has a major role to play in the lease, as it is funding the lease. In case Fluidstack is unable to pay, Google will intervene, and counterparty risk will be minimized to a great extent. The companies are also going to enter into an operations services agreement to maintain data centers whereby the identical Google payment backstop will be carried.
Hut 8 anticipates the lease to yield approximately $6.9 billion of net operating income in 15 years, or approximately $454 million per year. This makes AI infrastructure one of the primary sources of revenues, together with Bitcoin mining.
Funding structure lessens the capital risk
The project will be dependent on a debt financing model, and the banks are likely to meet the construction and development expenses up to 85%. JPMorgan is in the lead, and there is the involvement of Goldman Sachs. This design will restrict the initial capital outlay Hut 8 will have to inject whilst shortening the development periods.
The River Bend site has already started being constructed. The initial data hall will be ready by the second quarter of 2027, and other data halls will be added later on in the same year. Asher Genoot, the Chief Executive Officer, claimed that the project embodies a power-first and partner-driven approach as opposed to a race towards capacity deployment.
Crypto miners shift to AI infrastructure
The Hut 8 AI data center lease was important, as indicated by investor reaction. The announcement saw company shares increase by approximately 20% in pre-market investments. The expansion is based on Hut 8 previous move into AI with its Highrise AI subsidiary and installation of over 1,000 Nvidia H100 GPUs.
The acquisition is in line with a larger industry change. Core Scientific entered into an AI data center contract with CoreWeave worth $3.5 billion, and Galaxy Digital expanded Helios in Texas. Another AI infrastructure engagement of Cipher Mining involved Fluidstack coordinated by Google.
The mining companies in the Bitcoin sector are turning land, power connectivity, and data center experience into long-term AI computing income, with the global need for high-performance computing increasing.
