Canadian bitcoin miner HIVE Digital Technologies Ltd (ASX: HIVE) has formally announced that its artificial intelligence subsidiary, BUZZ HPC, has entered into a three-year GPU cloud services agreement with Bell AI Fabric, with a total contract value of approximately $220 million. The core objective of this collaboration is to provide foundational computing power support for AI startup Cohere, marking a significant step in HIVE's strategic expansion into high-performance computing and AI infrastructure.
Under the agreement's specifics, BUZZ HPC will deploy 2,304 NVIDIA Grace Blackwell GPUs within Bell Canada's data center located in British Columbia. These high-performance computing resources will be dedicated to supporting the AI models and services that Cohere delivers to its enterprise and government clients. Once this GPU cluster becomes operational, the project is anticipated to generate approximately $70 million in annual recurring revenue for HIVE.
This incremental revenue is expected to directly propel HIVE's high-performance computing business past its $100 million annual revenue target. To finance this large-scale infrastructure procurement, HIVE plans to utilize funds raised from its $115 million convertible note issuance in April.
The market responded positively to this news. At the time of reporting, HIVE's stock price had risen by approximately 9%, with a cumulative gain of nearly 24% over the past month. Concurrently, the industry-tracking exchange-traded fund, the CoinShares Bitcoin Mining ETF (ASX: WGMI), recorded a 5.4% gain on the day, with monthly gains exceeding 30%. Notably, HIVE is the eighth-largest holding in this fund.
This transaction is not an isolated move by HIVE into the AI sector but represents the latest component of its ongoing expansion strategy. As early as May, HIVE announced that BUZZ HPC planned to construct a 320-megawatt AI data center near Toronto, designed with a capacity to support the operation of over 100,000 GPUs.
Financial results from earlier this month revealed that HIVE's high-performance computing revenue for the 2026 fiscal year grew to $19.5 million, nearly double the previous fiscal year, with annual recurring revenue reaching $35 million. This substantial growth is primarily attributed to the deployment of Nvidia-powered GPU clusters and newly signed enterprise-level contracts.
Despite HIVE's rapid progress in its AI business, its holdings of BTC have decreased from 481 coins in the previous quarter to 150 coins, indicating a strategic shift in the company's asset allocation.
Meanwhile, the Bitcoin network is undergoing significant hash rate volatility. On June 14th, Bitcoin mining difficulty decreased by 10.09%, one of the largest declines in the network's history. Analysis suggests contributing factors include rising mining costs, a decline in BTC's price, seasonal power supply constraints in Texas, and broader shifts in the electricity market. Some perspectives further note that as miners redirect more electrical resources toward AI and high-performance computing projects, the hash rate resources available for Bitcoin mining may diminish, potentially affecting future growth in Bitcoin mining capacity.
Against a backdrop of reports highlighting that Bitcoin mining profitability has fallen to historically low levels, leaving some miners struggling, industry giants are accelerating their pivot to the AI domain. This trend of industry transformation is gaining momentum. On Tuesday, miner IREN (ASX: IREN) completed its acquisition of Spanish data center developer Nostrum Group, further solidifying its European data center footprint. Additionally, TeraWulf (ASX: WULF) recently added a new data center construction site in Kentucky, which is expected to eventually support over 1 gigawatt of AI and high-performance computing capacity.
The reallocation of power resources between Bitcoin mining and AI computing is driving a fundamental transformation in miners' business structures. This evolution from a singular focus on mining to diversified computing services may reshape the competitive landscape of the entire crypto infrastructure industry.
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