German data centre provider Northern Data AG is looking to sell its crypto mining segment, Peak Mining Frankfurt. For the company, an option for sale would create the opportunity to grow its artificial intelligence (AI) solutions business. The announcement prompted a 12% rally in Northern Data's stock, reports said. However, the company stressed the deal has not been finalised yet and will depend on the current cryptocurrency market situation.
Northern Data is now shifting its resources to benefit from surging demand for the AI sector. The funds obtained after selling Peak Mining Frankfurt will be used to fund the acquisitions of a data centre and the development of advanced AI infrastructure for the company.
The decision to explore a sale of EOS comes at a time when the growing cryptocurrency mining industry is facing increasing obstacles. By April 2024, the Bitcoin halving reduced the rewards to miners and several people profiting from the business are seeing a decline in profitability. Miners, including Northern Data, redirected their high-performance computing resources towards an AI platform in which the same amount of computing power is required but with higher revenue generation.
This shift toward AI is not unique to Northern Data. Other mining companies, such as Core Scientific, have also reported positive financial results after transitioning to AI services. For example, Core Scientific's deal to host 200 megawatts of GPUs for Coreweave led to a $4 billion boost in market capitalisation across several mining firms, according to reports from JPMorgan.
The potential sale of Peak Mining would provide Northern Data with the necessary funds to expand its AI solutions unit. The company's AI cloud service solution assists organisations in building and implementing their intelligent applications. Northern Data has forecast a threefold rise in its annual revenue in 2024 as the demand for AI computing services rises.
In addition to AI strategies, Northern Data has stated that it will expand its new data centres and purchase cutting-edge AI GPUs to enhance its structures. The company also plans to list its AI and data center business in a US exchange. The listing, if successful, could value Northern Data's AI division at up to $16 billion.