Shares of HIVE Digital Technologies rose more than 7% on Thursday after the company announced that its BUZZ High Performance Computing subsidiary had signed a three-year, $220 million GPU cloud service contract with Bell Canada and Canadian AI company Cohere. This is HIVE's largest AI infrastructure deal to date.

2304 Blackwell GPUs deployed in Canada

This contract will deploy 2,304 Nvidia Grace Blackwell GPUs at Bell's custom data center in Merritt, British Columbia. Cohere will use this computing power to run its AI platform for local Canadian customers, including businesses and government agencies.

In recent years, HIVE has been shifting its business focus from Bitcoin mining to high-performance computing. This transaction also shows that the company, originally known for its mining business, is accelerating its entry into the AI computing power leasing market.

The project is expected to increase annual revenue by $70 million after its launch.

The company anticipates the project will be operational between the end of 2026 and the beginning of 2027. At that time, HIVE is expected to generate approximately $70 million in additional recurring revenue annually. Prior to this, the company's existing GPU business already contributes approximately $35 million in revenue annually.

According to the company, the revenue target for the signed high-performance computing contracts has exceeded $100 million. For HIVE, this means that its AI business is beginning to move from the trial phase to a more concrete revenue-generating phase.

• Total contract amount: US$220 million
• Contract term: 3 years
• New annual recurring revenue: approximately US$70 million

Mining companies are accelerating their shift towards AI infrastructure.

HIVE's transformation did not happen suddenly. The company had previously shifted some of its GPU resources from cryptocurrency mining to AI computing and reached a new GPU procurement agreement with Dell last November. In April of this year, HIVE also completed a $115 million convertible bond financing round for hardware purchases.

The company is also moving forward with a larger AI data center project, planning to build a 320-megawatt facility in the Greater Toronto Area that will be able to accommodate more than 100,000 Nvidia GPUs when fully operational. HIVE expects the project to generate approximately $360 million in annualized recurring revenue once fully operational, and has set a target of $660 million in annualized revenue from high-performance computing by the end of 2028.

Amidst increasing volatility in Bitcoin mining revenue and intensifying competition, more and more mining companies are seeking more stable ways to monetize their computing power. In contrast, the demand for AI computing power is growing faster, and customers are more inclined to sign multi-year contracts, which has become a significant driving force for the transformation of mining companies.

Additional information:The original text mentions that the Canadian government had previously proposed a "sovereign AI computing" strategy and provided funding support for local AI computing power and Cohere, which provided a policy background for local data centers and enterprise-level AI deployments.