Bitcoin mining firm Bit Digital is poised to tap into the digital assets on its balance sheet to acquire additional graphic processing units (GPUs) for expanding its HPC business.
The company said in a release on Tuesday that it has finalized an agreement to supply an existing customer with an additional 2,048 GPUs, which will be procured from Dell, an authorized OEM of Nvidia.
This move is part of a broader strategy taken by some bitcoin mining companies to diversify and invest in AI capabilities, especially following bitcoin’s fourth halving, which pushed hashprice below $50/PH/s.
Also on Tuesday, Core Scientific announced an expansion of AI capacity for CoreWeave. Hut 8 secured a $150 million investment from CoreWeave’s investor Coatue Management.
Bit Digital expects the new GPUs to be delivered to its host in Iceland by July, with revenue generation starting in August.
While the total cost of the purchase was not disclosed, Bit Digital stated it intends to finance the deal with a mix of cash and digital assets from its balance sheet. As of the end of May, the company held 1,038 BTC and 20,508 ETH, valued at $144 million.
Bit Digital is already supplying the unnamed customer with 2,048 GPUs, and the new contract will double this supply to 4,096 units. The company projects this will generate $92 million in annual revenue over the three-year term. In Q1, Bit Digital reported $8.1 million in revenue from its GPU segment, with a gross margin of approximately 60%.
To reduce capital expenditure, Bit Digital said it has entered into a sale-leaseback deal with a third party for 1,024 units of the GPUs and is also exploring debt financing options to fund the purchases.