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Video hosting platform Rumble has announced a significant business combination with German AI infrastructure company Northern Data. This strategic move aims to enhance Rumble Cloud's capabilities by integrating Northern Data's extensive data center network, projected to offer 180 MW of power and approximately 22,400 Nvidia H100 and H200 GPUs.
The deal, valued at approximately $767 million based on Rumble's closing share price, will see Northern Data's existing investors receive a roughly 30% stake in the combined entity through a stock exchange. Rumble is also committing $200 million in potential performance-based payouts to Northern Data shareholders, tied to the success of its flagship data center in Corpus Christi, Texas.
Key Takeaways
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Rumble is acquiring Northern Data to expand its AI cloud infrastructure.
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The deal is valued at approximately $767 million.
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Tether, a significant investor in Northern Data, has also invested $775 million in Rumble.
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Northern Data is divesting its Bitcoin mining operations to focus on AI services.
Strategic Partnership with Tether
Adding significant weight to the acquisition is Tether's involvement. As a shareholder in Northern Data, Tether has also injected $775 million into Rumble as part of a strategic partnership. Following the completion of the acquisition, Tether has committed to purchasing $150 million worth of AI computing services from the merged company over three years. Furthermore, Tether will provide Rumble with $200 million in advertising commitments over the next two years.
Rumble CEO Chris Pavlovski expressed enthusiasm for the collaboration, stating, "Northern Data. Tether. Rumble. This is how we are building the AI ecosystem of the future from the ground up."
Northern Data's Strategic Shift
This acquisition marks a pivotal moment for Northern Data, which recently announced the sale of its Bitcoin mining division, Peak Mining. The sale includes an upfront payment of $50 million, with potential additional payments reaching $150 million based on the profitability of its Corpus Christi data center post-Rumble deal. This strategic pivot away from cryptocurrency mining towards AI services was initially signaled in October 2024, as Northern Data sought to concentrate its resources on the burgeoning AI sector. The Corpus Christi facility, with a total network capacity of 600 MW, currently utilizes 100 MW for cryptocurrency mining.
Sources
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Rumble to Acquire Former Bitcoin Miner Northern Data with Tether Backing, ForkLog.
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Tether-backed Rumble, Northern Data Said Close to Merger Deal, Bloomberg.
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