Hut 8 Pays Off $38M Loan, Eyes AI Market Expansion

The Bitcoin mining company repays a major loan and moves into artificial intelligence computing with a new GPU service for developers.

Cryptocurrency mining company Hut 8 has taken major steps to strengthen its financial standing and expand beyond its traditional focus on Bitcoin mining. The company recently paid off a $38 million loan from Anchorage Digital through stock conversion and launched a new GPU-as-a-service program aimed at artificial intelligence (AI) developers.

Hut 8 converted its debt into common stock at a price of $16.395 per share, a 51% premium over the company’s 20-day volume-weighted average share price. By comparison, the company’s stock opened at $12.30 on October 1, making the conversion terms highly favorable to Anchorage Digital. Before this transaction, Hut 8 had used 21,000 mining machines as collateral for the loan, which it restructured in early 2023. The loan payoff now frees up these assets, providing the company with more flexibility in its operations.

While Hut 8 has reduced its debt, the company still holds about $290 million in total liabilities, including a $150 million convertible note from Coatue Management. This debt is tied to the company's shift toward AI computing. "With a strengthened balance sheet and decreased leverage, we believe we are even better positioned to advance discussions with prospective counterparties and execute on the development of next-generation mining and AI data centers," said Hut 8 CEO Asher Genoot.

On September 26, Hut 8 launched a GPU-as-a-service program in partnership with AI developers AdvizeX. The new service will offer access to a powerful cluster of 1,000 Nvidia H100 GPUs via Hewlett Packard Enterprise supercomputers. This venture marks Hut 8’s entry into the AI computing market, a growing space where companies are seeking new revenue opportunities amid fluctuating cryptocurrency markets and the impending Bitcoin halving event.

Hut 8 currently operates 10 Bitcoin mining facilities in Alberta, New York, and Texas, along with five high-performance computing data centers in British Columbia and Ontario. However, the company has faced some recent challenges, including the closure of a mining facility in Drumheller, Alberta, due to rising energy costs and outages. In response, Hut 8 has plans to open a new power generation facility in Texas.

As cryptocurrency miners explore diversification, Hut 8's move into AI computing signals a significant evolution in its business strategy. With its GPU service and AI-focused partnerships, the company is positioning itself to thrive in both the blockchain and AI industries.

photo source / Blockonome