Rumble is advancing the acquisition of AI company Northern Data to strongly expand in the global AI cloud computing sector.
The deal is expected to involve a share exchange worth $1.17 billion, focusing on the super-strong GPU infrastructure and large-scale data centers of Northern Data, helping Rumble get closer to a leading position in the global AI race.
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Rumble proposes to acquire Northern Data for a value of $1.17 billion in stock.
Northern Data owns nearly 23,000 high-end Nvidia GPUs and data centers with a capacity of up to 850 MW.
The conditional agreement requires Northern Data to divest its Bitcoin mining operations before the merger.
What valuable GPU assets does Rumble want to leverage from Northern Data?
Rumble targets Northern Data's data centers and Taiga cloud systems with nearly 20,480 Nvidia H100 GPUs and over 2,000 H200 GPUs, which are top chips supporting modern AI applications.
Controlling large-scale infrastructure with a power supply capability of up to 850 MW, including a 180 MW project underway in Georgia, will help Rumble strengthen its leadership position in global AI cloud computing.
This is an infrastructure expansion strategy aimed at meeting the enormous data processing needs in the AI field, reflecting Rumble's long-term ambitions in the international market.
Why does Northern Data have to sell its Bitcoin mining segment before the merger?
A prerequisite for the deal to proceed is that Northern Data must sell its Bitcoin mining segment Peak Mining, which is being negotiated with a $235 million agreement alongside the U.S. miner Elektron Energy.
The majority of the proceeds from this sale will be used to repay a shareholder loan from Tether, which holds 54% of the shares in Northern Data.
Withdrawing from the Bitcoin mining market allows a focus on AI and cloud computing, while also reducing risks and paving the way for a merger agreement.
"This agreement helps create a world-class AI cloud infrastructure platform, leveraging the superior GPU power and large-scale data center systems of Northern Data."
Statement from Rumble's leader, early 2024
What role does Tether play in this agreement?
Tether confirms full support for the plan, committing to swap Northern Data shares for Rumble shares on par with other shareholders.
Moreover, Tether is also expected to become a major GPU customer of Rumble through multi-year long-term contracts, demonstrating extensive strategic collaboration between the two parties.
The consensus from major shareholder Tether adds credibility to the deal while strengthening financial and technological resources for Rumble's development in the AI field.
How did the market react to the acquisition proposal?
Despite the very promising plan, Northern Data's stock has dropped 27% after the news, reaching its lowest point in a year, with a valuation of approximately $18.3 per share, 32% lower than the previous closing price in Frankfurt.
This shows that investors are still cautious about the deal's prospects or that the proposed price is not attractive enough, while the agreement is still in the negotiation, due diligence, and legal approval stages.
Currently, the deal is not yet guaranteed to be completed; however, if successful, the combination of video platforms and AI cryptocurrency technology will create a significant advancement in the global market.
Frequently asked questions
What are Rumble's plans after acquiring Northern Data?
Rumble expects to leverage its large-scale GPU systems and data centers to become the world's leading AI cloud computing provider, expanding its influence in the AI industry.
Why does Northern Data have to sell its Bitcoin mining segment?
This measure aims to concentrate resources on AI while also helping to repay shareholder loans and ensure a smooth merger with Rumble, minimizing the risk of conflicts of interest.
What role does Tether play in this deal?
Tether is a major shareholder, committed to swapping shares and collaborating to provide GPUs for Rumble under a multi-year contract, supporting financial and technological stability.
How does the market evaluate the acquisition proposal?
Northern Data's stock dropped sharply right after the news, reflecting investor hesitance regarding the price and the feasibility of the deal in the short term.
How will a successful deal impact the AI field?
The combination of powerful GPU infrastructure will enhance AI processing capabilities on the cloud platform, contributing to innovation and increasing global competitiveness in the AI technology industry.
Source: https://tintucbitcoin.com/northern-data-dam-phan-ban-117-ty-usd/
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