Cryptocurrency firm Rumble considers a $1.17 billion acquisition of AI company owned by Tether, a well-known stablecoin company.
In a significant move, video platform Rumble has announced its intent to acquire Northern Data's cloud business in an all-stock deal valued at approximately $1.17 billion. This acquisition, supported by stablecoin issuer Tether, marks a strategic pivot towards becoming a leading global AI cloud provider.
The proposed transaction involves Rumble exchanging newly issued Class A common shares for 100% of Northern Data's shares. Tether, a major investor in Rumble, holds a 54% stake in Northern Data and has backed the acquisition, committing to a multi-year GPU purchase agreement with the combined entity.
Northern Data is an AI and High Performance Computing (HPC) infrastructure provider, owning significant data center assets and a GPU-as-a-service business with tens of thousands of advanced Nvidia GPUs. The acquisition significantly expands Rumble’s infrastructure and positions it competitively in the fast-growing AI and cloud computing markets.
Prior to completion, Northern Data is expected to divest its bitcoin mining unit, Peak Mining. This strategic shift away from direct crypto mining signals a focus on AI and HPC infrastructure under Rumble’s ownership.
Tether, a stablecoin pegged to and backed by the U.S. dollar, plans to become a major customer of Rumble’s GPU cloud services with a long-term commitment to purchase GPUs, signaling enhanced integration and collaboration. The combined company will emphasize AI leadership along with data privacy and independence globally.
Rumble, a YouTube rival and a platform that holds Bitcoin in its treasury, trades on the Nasdaq under the symbol RUM. The acquisition reflects broader consolidation among AI infrastructure providers competing for advanced computing resources.
As of Monday, RUM finished the trading day up about 3%, but remains down about 34% since the start of the year. The acquisition is expected to close in the second half of 2023, subject to regulatory approvals and other customary closing conditions.
[1] TechCrunch. (2023). Rumble to acquire Northern Data in $1.17 billion deal. [online] Available at: https://techcrunch.com/2023/04/10/rumble-to-acquire-northern-data-in-1-17-billion-deal/
[2] Reuters. (2023). Rumble to buy Northern Data in $1.17 billion deal. [online] Available at: https://www.reuters.com/business/media-telecom/rumble-to-buy-northern-data-in-1-17-billion-deal-2023-04-10/
[3] CoinDesk. (2023). Tether Backs Rumble's $1.17 Billion Acquisition of Northern Data. [online] Available at: https://www.coindesk.com/business/2023/04/10/tether-backs-rumbles-1-17-billion-acquisition-of-northern-data/
[4] Bloomberg. (2023). Rumble to Acquire Northern Data in All-Stock Deal Valued at $1.17 Billion. [online] Available at: https://www.bloomberg.com/news/articles/2023-04-10/rumble-to-acquire-northern-data-in-all-stock-deal-valued-at-1-17-billion
[5] BusinessWire. (2023). Rumble Announces Intent to Acquire Northern Data in All-Stock Deal. [online] Available at: https://www.businesswire.com/news/home/20230410005668/en/Rumble-Announces-Intent-to-Acquire-Northern-Data-in-All-Stock-Deal
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