Bit Digital launches new AI business, procures NVIDIAH100 GPUs

Bit Digital launched Bit Digital AI, a new business line that will provide specialized infrastructure to support generative AI workstreams. The company has commenced Bit Digital AI operations by signing a binding term sheet with a customer to support their GPU-accelerated workloads. Under the agreement, Bit Digital will provide the customer with rental services for a minimum of 1,024 GPUs and a maximum of 4,096 GPUs. The total number of GPUs, contract length, and corresponding unit pricing will be determined upon signing the master service agreement. Bit Digital has agreed to purchase 132 FusionOne HPC from xFusion Digital Technologies, a global provider of digital infrastructure and services, for approximately $35M. The GPUs are expected to be delivered to the company by the end of 2023 and will be deployed at a Tier-3 datacenter. Bit Digital intends to finance the purchase with a mix of cash on hand, digital assets on the balance sheet, new equity issuance, and potentially equipment financing. Bit Digital has entered into a binding term sheet to provide cloud-based GPU resources to a customer with an initial contract duration spanning one to three years. For the minimum 1,024 GPUs, Bit Digital expects the contract to generate between approximately $23M and $27M in annual revenue. The maximum contract value for 4,096 GPUs with a three-year contract term exceeds $250M worth of revenue. Revenue generation is expected to begin in January 2024, and the contract is expected to contribute substantially higher margins than the Company’s existing business operations. Bit Digital will source additional GPUs in the event the finalized contract exceeds the minimum 1,024 figure and expects to be able to take delivery of such additional GPUs during fiscal Q1 2024.