Quicktake

• IPO Plans: Northern Data AG exploring U.S. IPO for AI and data center unit.
• Valuation: Expected value between $10 billion and $16 billion.
• Potential Advisors: Company consulting potential advisors for the IPO.
• Timeline: Listing could occur as early as the first half of 2025.
• Previous Announcements: Preparing IPOs for both cloud and bitcoin mining units.
• Expansion: U.S. bitcoin mining unit, Peak Mining, acquired new 300 MW site.

Germany-based computing services firm Northern Data AG is gearing up for an initial public offering (IPO) in the United States for its artificial intelligence (AI) cloud computing and data center businesses. This strategic move, aimed at expanding its market presence and capitalizing on the growing demand for AI and cloud services, was reported by Bloomberg, citing sources familiar with the matter.

Northern Data, known for operating large-scale cryptocurrency mining facilities in Europe and the U.S., is currently in the process of consulting potential advisors and may appoint lead banks in the coming months. The company is targeting a listing on the Nasdaq, potentially as early as the first half of 2025. While no final decisions have been made regarding the offering, preliminary bank estimates suggest the valuation of the entity up for IPO could range between $10 billion and $16 billion.

Strategic Preparations for IPO

Last November, Northern Data indicated to analysts and investors that it was preparing for an IPO for its cloud unit, in addition to a separate U.S. listing for its bitcoin mining business. Although the company has yet to confirm whether the bitcoin mining unit’s IPO is still progressing, this dual strategy underscores Northern Data’s ambition to solidify its foothold in both the AI and cryptocurrency sectors.

Expansion in the U.S. Market

Northern Data’s U.S. bitcoin mining unit, Peak Mining, has been making significant strides in expanding its operations. In May, Peak Mining purchased its second 300-megawatt mining site, bolstering its capacity. With nearly 700 megawatts of mining centers in development, this expansion positions Northern Data as one of the largest bitcoin miners in the U.S. In 2023, Peak Mining mined 2,298 BTC, generating over €59.7 million ($64 million) in revenue despite a year-on-year decrease of 18%.

Financial and Strategic Partnerships

The company’s financial maneuvers have also been notable. Last year, Northern Data secured a €575 million loan from stablecoin firm Tether. This loan followed Tether’s strategic investment in Northern Data in September to support the company’s blockchain and AI services. The partnership between the two firms was further strengthened in January when Northern Data acquired a €400 million investment vehicle from Tether, solidifying Tether’s position as a key investor in the computing firm.

Stock Performance and Market Listing

Northern Data AG’s shares saw a 5.04% increase on Monday, although they have experienced a 5.84% decline so far this year. The company has been listed on Xetra, a trading venue operated by the Frankfurt Stock Exchange, since 2018. This mixed performance in the stock market highlights the volatility and challenges faced by companies operating in the rapidly evolving tech and crypto sectors.

Anticipated IPO and Market Impact

The anticipated U.S. IPO of Northern Data’s AI and data center unit is a significant development that could have a considerable impact on the market. By listing on Nasdaq, Northern Data aims to tap into the robust U.S. capital markets and attract a diverse investor base. The substantial valuation range of $10 billion to $16 billion reflects the high expectations and confidence in the company’s growth prospects.

Conclusion

Northern Data AG’s move to pursue an IPO in the U.S. for its AI cloud computing and data center businesses is a strategic decision aimed at leveraging the growing demand for AI and cloud services. With substantial financial backing from Tether and ongoing expansions in the U.S. bitcoin mining sector, Northern Data is positioning itself for significant growth and market presence. The planned IPO, expected to take place as early as the first half of 2025, is set to be a landmark event for the company, offering it a platform to further its technological advancements and market reach.