Tether and Rumble are partnering to buy all of Northern Data's stock in an effort to fully take over the AI infrastructure provider. The deal aims to expand on Northern Data's already remarkable AI and high-performance computing (HPC) operations, Rumble announced on Monday. Tether, the company that issues the USDt (USDT) stablecoin and is already Northern Data's largest shareholder, is fully committed to backing the transaction. Additionally, don't be shocked if future partnerships in data storage, peer-to-peer communications, and artificial intelligence are involved. You can anticipate much more than just a stablecoin when Tether is involved, after all.
The Expanding Impact of Tether
With its $775 million investment in anti-censorship YouTube alternative Rumble at the end of 2024, Tether is the link between all of these businesses. When Rumble revealed its USDT-supporting Bitcoin and stablecoin wallet in May, their collaboration became even more solid. It appears that Tether is going beyond simply issuing stablecoins.
The three main businesses of Northern Data are Peak Mining (Bitcoin mining), Ardent Data Center (data infrastructure), and Taiga Cloud (GPU cloud services). In order to focus more on its AI and HPC operations, the company intends to sell its mining division and reinvest the proceeds back into those fields. Thus, if you were searching for indications of a significant change in focus, this is it.
What's on the Table?
Northern Data shareholders will receive 2.319 newly issued Class A Rumble shares for every Northern Data share if the deal is approved. This would entail giving Northern Data's shareholders roughly 33.3% of Rumble's ownership. Northern Data shares are worth $18.27, or about $1.17 billion, based on Rumble's closing price of $7.88 on Friday. Not too bad for a major AI play.
But hold on, there's more. The possible sale of Northern Data's Bitcoin mining division could also cause changes to the agreement. Tether is the true power player here since, if everything goes according to plan, they will hold most of Rumble's Class A common stock.
But Tether isn't done yet. It is anticipated that Tether will modify its current loan to Northern Data in order to give the purchased company additional funding. As you may recall, in late 2023, Tether provided Northern Data with debt financing totaling 575 million euros, or roughly $610 million. This partnership appears to be just getting started.
Will this agreement be finalized and pave the way for significant advancements in blockchain and artificial intelligence? One thing is certain: Tether is setting itself up for something far more significant than stablecoins, though only time will tell.
Matvii Diadkov
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