Hut 8, one of North America’s largest Bitcoin miners, announced on September 26 that its GPU-as-a-service vertical has begun generating revenue with the full deployment of its inaugural GPU cluster for an AI cloud developer.
Located in a tier-three data center in Chicago, the cluster comprises multiple Hewlett Packard Enterprise (HPE) Cray supercomputers powered by 1,000 NVIDIA H100 GPUs, per a blog post.
Hut 8 partnered with IT service providers HPE and AdvizeX to design, configure, and commission the cluster, which will operate under its Highrise AI subsidiary. The company secured a five-year contract with the AI cloud developer, including fixed infrastructure payments and revenue sharing.
Our GPU-as-a-Service vertical is officially live following the deployment of our first cluster.
“The launch of our GPU-as-a-service vertical further diversifies our compute layer, which now spans AI compute, Bitcoin mining, and traditional cloud services. Consistent with our… pic.twitter.com/jaC6Hu3WG2— Hut 8 (@Hut8Corp) September 26, 2024
Scaling Compute Layer for Maximum Returns
The launch of the GPU-as-a-Service vertical further diversifies the company’s compute layer, which now includes AI compute, Bitcoin mining, and traditional cloud services.
“A thoughtfully structured AI compute business will be accretive both financially and strategically and drive topline growth, revenue diversification, and long-term value creation,” said Asher Genoot, CEO of Hut 8.
As Hut 8 continues to scale its compute layer, the company seeks to maximize returns on its power assets and digital infrastructure portfolio.
Mitigating Bitcoin Halving Risks
Bitcoin mining remains a core part of Hut 8’s business.
However, by diversifying its revenue streams beyond Bitcoin mining, it seeks to create a more resilient and sustainable business model to mitigate the financial challenges associated with the recent Bitcoin halving, which reduced block rewards from 6.25 BTC to 3.125 BTC.
Miners now earn half as much from each mined block, so their profitability has been directly impacted.
According to Hut 8’s presentation to investors in September 2024, the cost of mining a Bitcoin doubled in just one year, increasing from $11,321 in Q2 2023 to $26,232 in Q2 2024.
According to the presentation, over the past year, Hut 8 has diversified its revenue streams to mitigate these risks, expanding its operations into power services, digital infrastructure, and the aforementioned GPU-as-a-service, whose revenue model includes fixed infrastructure payments plus revenue sharing.
Hut 8 offers various services, including helping companies design, build, and operate their projects. The mining firm also provides data center space, cloud services, and internet connections.
Additionally, it offers services like hosting mining equipment for other companies and selling or repairing equipment. These services generate recurring income through long-term contracts.
In July, the company also raised $150 million from investment firm Coatue to fund its expansion into serving AI customers.
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