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Stablecoin Issuer Tether Ventures Into AI With Northern Data in $427M Nvidia Chip Splurge
Damoon, a Tether subsidiary in which Northern Group acquired a stake earlier this year, has purchased $427 million of Nvidia chips for generative AI cloud computing.
Updated Sep 21, 2023, 3:09 p.m. Published Sep 21, 2023, 3:09 p.m.
Stablecoin issuer Tether said it is branching into artificial intelligence (AI) through a subsidiary jointly owned by bitcoin (BTC) miner and data cloud provider Northern Data Group (NB2).
Damoon Designated Activity, in which Frankfurt-based Northern Data acquired a majority stake in July, bought some 400 million euros ($427 million) worth of Nvidia graphic processing units (GPU), the German company said in a press release.
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The chips will be deployed through Northern Data’s cloud service, Taiga Cloud, with plans to offer access to customers starting late in the fourth quarter.
The development is the latest example of Tether, the largest stablecoin company with its $83 billion USDT, venturing outside of its original business domain. This year, the firm has invested in BTC mining operations in South America and a payment processor in Georgia.
For years, Tether has been criticized within the crypto industry for insufficient transparency about its stablecoin reserves and controversial investment and lending maneuvers.
Read more: Tether Is Going on a Bitcoin Buying Spree, but It Should Be Holding Cash
Northern Data is a publicly listed data firm that has diversified from crypto mining into providing computing power for AI-related data crunching. The shares rose 2.7% Thursday.
“We are excited about this investment into Northern Data Group as it represents a fresh venture into new technological frontiers,” Paolo Ardoino, Tether's chief technology officer, said in a statement.
Tether said the investment does not impact the backing reserves of its stablecoins.
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