Hut 8 surges on $7B Google-backed AI data center agreement
Hut 8 Corp.'s (HUT) stock soared on Wednesday after it announced that it had signed a 15-year, $7 billion lease agreement with compute operator Fluidstack for 245 megawatts (MW) of IT capacity at its River Bend data center campus in Louisiana.
In addition to Fluidstack, Hut 8 has also entered into a partnership with Anthropic and will deliver up to 2,295 MW of AI data center infrastructure to the artificial intelligence startup as well.
The lease comes with three five-year renewal options that could push the value of the contract up to $17.7 billion if the options are exercised.
Google (GOOG) is providing financial backstop on the agreement, covering lease payments and related pass-through obligations for Fluidstack. Details of how much of the lease payments Google would cover were not disclosed.
Hut 8's stock surged as much as 11.2% on news of the deal.
“Scaling frontier AI infrastructure is, at its core, a power challenge,” Hut 8 CEO Asher Genoot said in a statement. “Hut 8’s power-first, innovation-driven development model enables us to originate and develop greenfield data center sites at the pace and scale required by leading model developers.
"Through this partnership, we are aligning power, data center design, and compute deployment into an integrated platform capable of delivering at gigawatt scale."
The company said that Hut 8 and Anthropic may jointly develop up to 1,050 MW additional optional capacity to scale across the River Bend development pipeline.
New partnerships could be 'transformative' for Hut 8
The data hall, or the room within a data center where the actual IT equipment is housed, is expected to be completed and ready for commissioning at River Bend in the second quarter of 2027, according to Hut 8.
Additional data halls are scheduled to come online throughout the rest of 2027.
“This partnership is an expansion of our existing work with Fluidstack and marks a new opportunity to collaborate with Hut 8 to bring additional capacity online by early 2027," James Bradbury, head of compute at Anthropic, said in a statement. "Hut 8’s ability to source and deliver infrastructure at scale provides the runway necessary to continue advancing the capabilities of our models.”
This is at least the third AI data center infrastructure deal that Google has partnered with Fluidstack on this year.
The tech giant in August agreed to backstop $1.8 billion of Fluidstack’s lease obligations to support project-related debt financing as part of high-performance computing (HPC) colocation contracts Fluidstack had signed with TeraWulf (WULF).
In November, Google agreed to backstop $1.4 billion of Fluidstack's lease obligations to support project-related debt financing in an HPC deal with Cipher Mining (CIFR).
Google received equity stake in both TeraWulf and Cipher Mining as part of these deals. It's unclear if it's receiving shares in Hut 8 as part of this latest agreement.
Hut 8 has taken the path that many bitcoin miners have been taking by building out its HPC and AI data center infrastructure to capture the opportunities created by the substantial need for compute from hyperscalers. However, unlike some miners that are abandoning the crypto space entirely, Hut 8 is continuing to balance its bitcoin mining with its AI ambitions.
“Hut 8 envisions a middle ground between traditional Bitcoin mining and AI data centers,” the company wrote earlier this year.
In March, Hut 8 launched American Bitcoin Corp., a new mining venture majority-owned by Hut 8 and created with Eric Trump. Formerly known as American Data Centers, the company was initially founded by Eric and Donald Trump Jr.
The company announced a deal in June to take American Bitcoin public via a merger with Gryphon Digital Mining (GRYP).
Benchmark analysts, led by Mark Palmer, maintained a Buy rating on Hut 8 in a client note on Wednesday, while also reiterating a $78 price target.
Palmer sees the infrastructure deal with Fluidstack and Anthropic as being "transformative for Hut 8's AI ambitions."