Stablecoin firm Tether is entering a $420 million deal involving artificial intelligence chips and an overseas Bitcoin crypto mining firm, Forbes reported on Sept. 20.
Tether has not officially announced the investment. Rather, Forbes appears to have based its report on statements from Northern Data and its executives.
That report indicates that Tether has spent $420 million on 100,000 Nvidia H100 GPUs — approximately 2% of the 550,000 GPUs that Nvidia will ship this year. Tether made the purchase on behalf of Northern Data, a German crypto mining firm that intends to rent cloud access to those thousands of specialized chips to AI startups. In turn, Tether will gain 20% stake in Northern Data.
According the reporting, however, Tether did not make the purchase directly. Instead, it is conducting the deal and GPU purchase through an Irish shell company owned by Northern Data, called Damoon.
Northern Data itself will take 70% stake in Damoon, a number seemingly confirmed by earlier announcements in July. Northern Data could acquire the rest of Damoon, according to Forbes, though the cost of a total acquisition is unknown.
Northern Data CEO Aroosh Thillainathan told Forbes that his company was not able to purchase those chips through Nvidia directly due to the rapid rate at which the firm’s chip availability is being exhausted. As such, Tether had to buy the required chips itself.
A marriage of controversial companies
Forbes went on to highlight various controversies around Northern Data. The company has previously purchased hardware through shell companies. It has also missed certain financial reports, and German regulators once filed a criminal complaint over erroneous revenue reports. The latter case has been closed without further action.
Tether is best known for its $83 billion USDT stablecoin, which itself has attracted controversy due to a lack of transparency around assets in its reserve.
Tether otherwise began to invest in crypto mining this May. That expansion is seemingly unrelated to the deal at hand: Northern Data is a German firm, whereas Tether invested in an unnamed Uruguay mining firm several months ago.
At press time, Tether had not replied to requests for comment.
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