NEW YORK, October 23, 2023 /PRNewswire/ — Bit Digital, Inc. (Nasdaq: BTBT) (“Bit Digital” or the “Company”), a sustainable digital infrastructure platform for digital assets and cloud computing services, headquartered in New York, is pleased to announce the launch of Bit Digital AI, a new business line that will provide specialized infrastructure to support generative artificial intelligence (“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. Concurrently, Bit Digital has agreed to purchase 1,056 NVIDIA HGX H100 GPUs and has funded the initial deposit for the purchase order.
Bit Digital has agreed to purchase 132 FusionOne HPC from xFusion Digital Technologies Co., Ltd. (“xFusion”), a leading global provider of digital infrastructure and services, for approximately $35 million. The FusionOne HPC solution is an integrated HPC platform, and each configuration ordered by Bit Digital includes NVIDIA HGX H100 8-GPUs, for a total of 1,056 GPUs. The GPUs are expected to be delivered to the Company by the end of 2023 and will be deployed at a Tier-3 datacenter to be announced at a later date. 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. The customer is focused on developing AI applications, including their own proprietary large-language model (LLM), and is well-capitalized following a 2023 funding round.
Pricing and total value of the contract will be determined by the total number of GPUs and contract term. For the minimum 1,024 GPUs, Bit Digital expects the contract to generate between approximately $23 million and $27 million in annual revenue. The maximum contract value for 4,096 GPUs with a three-year contract term exceeds $250 million 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.
Sam Tabar, Bit Digital’s CEO, commented: “We are pleased to take these steps to materially diversify our business and enter a market with robust demand and growth expectations. This new venture is an excellent expansion of our platform. This business line aims to provide a non-correlated income stream that will help the Company weather potential downturns in its core bitcoin mining and ETH staking businesses. We believe that the long-term success of our bitcoin mining operation is predicated on our ability to install alternative, durable revenue lines that enable us to pursue a countercyclical growth strategy and be less beholden to short-term gyrations in hash price.
From the onset of our careful evaluation of this business, our strategy was only to pursue this avenue if we had a well-capitalized, anchor customer in place. We were able to secure a customer with a significant liquidity runway and an impressive business model. We have long operated with an infrastructure-light business model that emphasizes efficient asset procurement and sourcing the most cost-effective hosting opportunities. We were able to apply these skills to secure the necessary elements to launch Bit Digital AI, and this experience leads us to believe this can be a highly scalable business that can help Bit Digital become a true through-cycle enterprise.”
About Bit Digital
Bit Digital, Inc. is a sustainable digital infrastructure platform for digital assets and cloud computing services headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has also established a business line, Bit Digital AI, that offers specialized cloud-infrastructure services for artificial intelligence applications. For additional information, please contact [email protected] or visit our website at www.bit-digital.com.
Investor Notice
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under “Risk Factors” in Item 3.D of our Annual Report on Form 20-F for the fiscal year ended December 31, 2022. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital’s production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors. See “Safe Harbor Statement” below.
Safe Harbor Statement
This press release may contain certain “forward-looking statements” relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are “forward-looking statements.” These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects,” or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.