Bitcoin mining company raises $16 million to transition to AI
Luxor raises $16 million to expand into AI. Mining companies meanwhile conclude billions of contracts for data centers and high-performance computer systems.
More and more companies from the Bitcoin sector are focusing on artificial intelligence (AI). Luxor Technology, a company that provides services to Bitcoin miners, is also taking that step. The US company has raised $16 million to expand its business in the AI market.
Luxor announced Tuesday that the investment round was led by CMT Digital. Mining equipment manufacturers Canaan and MicroBT also participated in the investment.
The money will be used to trade AI hardware and develop contracts that allow companies to set up-front prices for computing power. Luxor did not disclose how much of the amount raised is actually new capital.
The step fits within a broader development. More and more Bitcoin miners are using their existing infrastructure for AI data centers. According to figures from CoinShares, listed mining companies had already concluded more than $70 billion in contracts for AI and high-performance computer systems by the end of March.
Still, not everyone stops Bitcoin mining. The listed nip Group announced last week that it wanted to expand its mining capacity by about 48 percent. The company ultimately expects to produce around 195 Bitcoin (BTC) per month.
According to Luxor director Ethan Vera, the transition to AI is more complicated than is often thought.
Luxor works with Bitcoin miners that collectively represent nearly two gigawatts of power capacity. Research on more than half of these shows that most locations have sufficient electricity and fibre optic connections.
However, new data centers often have to be built to support AI systems.
Luxor also focuses on trading in contracts that allow companies to protect themselves against changing computing power prices.
According to investor Sam Hallene of CMT Digital, this market is still in its infancy. In particular, the limited transparency around pricing of AI equipment poses a challenge.
To change that, Luxor already launched a price index for Nvidia AI servers in August. This allows companies to monitor the asking prices of these systems on a daily basis.