Tether Grants $610 Million Loan to Northern Data Group

Tether has extended its loan facility to German data center operator, Northern Data Group. The  $610 million loan will help Northern Data Group expand its  Bitcoin mining, AI, and data center operations. 

“Northern Data Group entered into a loan agreement with a company of the Tether Group, under which it secured a €575 million debt financing facility,” Northern Data wrote in a statement. “The facility is unsecured, at standard market conditions and has a term until Jan. 1, 2030.”

Peak Mining, the Bitcoin mining arm of Northern Data Center will use the financing to scale its Bitcoin mining operations via purpose-built MicroBT liquid-cooling mining technology. Liquid-cooled mining is a more efficient heat management mining system that potentially boosts hardware performance compared to air-cooled systems.

Because of the significantly higher set up and maintenance costs, the business needs external funding, hence the loan. It will also be used to acquire sophisticated Nvidia AI hardware, enabling Northern Data’s Taiga Cloud business to expand its generative artificial intelligence cloud services.

“As the demand for technological innovation and acceleration shows no signs of slowing down, this debt facility will allow Northern Data Group to continue capitalizing on the market opportunities within each sector of our three subsidiaries, Taiga Cloud, Ardent Data Centers and Peak Mining,” Northern Data CEO Aroosh Thillainathan said. “We’re excited for the further innovation we will achieve through this raise as we drive further progress in the AI, ML and Generative AI industries.”

Tether’s Continuing Support for Northern Data

Tether has shown commitment towards supporting Northern Data Center in more than one way. In September, the company made a strategic investment of over $400 million into Northern Data, marking a significant step into artificial intelligence.

The loan facility is another demonstration of Tether’s commitment to developing Northern Data Center.

“Tether Group is proud to support Northern Data Group in its ability to provide customers access to flexible, energy efficient high performance computing infrastructure,” Tether Group incoming CEO Paolo Ardoino said.

The loan will be drawn over the next year, and is provided from Tether’s profits and not part of Tether’s stablecoin consolidated reserves. 

“As publicly disclosed in our reports, Tether has been achieving an average of ~1B per quarter in net operating results as reported over the last quarters and the project remains the same going forward, due to the high interest rates on US T-Bills,” Ardoino said.

“A significant portion of these profits has been prudently retained within our reserves, contributing to the accrual of excess reserves. This strategy has enabled us to overcollateralize our stablecoins by as much as 104%,” he added.

Tether Invests in bitcoin Mining

Tether has shown interest in Bitcoin mining since this year began. The company has already invested in Bitcoin mining in Uruguay using sustainable energy. The company said at the time that it was leveraging the renewable energy abundance of Uruguay to mine Bitcoin.

Ardoino says a portion of Tether’s profits will still be invested into energy and other aspects of technology.

“Additionally, as part of our disclosed plans, a minor portion of these profits will be strategically reinvested in data, energy and P2P communications infrastructure,” he added.

Northern Data Center is the latest beneficiary of Tether’s support, but it may be doing more in terms of Bitcoin mining and energy development going forward.

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