Northern Data AG is talking to potential advisers about a U.S. initial public offering of its combined artificial intelligence, cloud computing and data center businesses that could fetch a valuation of as much as $16 billion, according to people familiar with the matter.
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(Bloomberg) — Northern Data AG is in talks with potential advisers about a U.S. initial public offering of its combined cloud, artificial intelligence and data center businesses that could fetch a valuation of as much as $16 billion, according to people familiar with the matter.
The company has asked several potential advisers to pitch for the role and could hire leading banks in the coming months, the people said. Under the current plan, Northern Data would list an entity that combines its cloud computing business, called Taiga, and its data centers, called Ardent, on the Nasdaq as early as the first half of next year.
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The two sources said the banks had suggested a valuation of between $10 billion and $16 billion for the company, adding that Northern Data could also sell a minority stake in the unit to investors ahead of the listing.
Discussions are ongoing, details could change and the company may decide not to proceed with the strategic options under consideration, the people said. A Northern Data representative declined to comment.
Northern Data’s shares have fallen about 5% this year, giving it a market value of about 1.3 billion euros ($1.4 billion). The company, based in Germany’s financial capital of Frankfurt, went public in 2018, data at the time showed.
The move comes as cloud computing companies in the AI race are attracting a flood of investment. CoreWeave Inc., a cloud computing provider, has raised $8.6 billion in funding, including a $1.1 billion preferred equity investment that gave the startup a $19.1 billion valuation, according to a Bloomberg News report.
Northern Data was considering an initial public offering of its cloud computing unit alone and, separately, listing its U.S. bitcoin mining operations, it told analysts and investors in November.
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Peak Mining, the company’s U.S.-based bitcoin mining unit, has nearly 700 megawatts of data centers under construction or in active development, according to a statement in May. That would make it one of the largest cryptocurrency mining companies in the United States.
The declining profit margins in cryptocurrency mining have prompted mining companies to transform their energy-intensive data centers into digital infrastructure capable of running generative AI applications. Access to large amounts of power and expertise in running GPU-based operations could give mining companies an advantage over some traditional data center operators.
Companies seeking to go public in the cryptocurrency space, such as stablecoin issuer Circle and digital asset exchange Kraken, have faced headwinds. The U.S. Securities and Exchange Commission has been at odds with Kraken over allegations that it operates an unlicensed exchange, which the company denies, while the regulatory status of stablecoins remains uncertain.
In 2022, Northern Data was one of the largest Ethereum mining companies, dedicating about 70% of its operations to it. After a software update to the Ethereum blockchain, the company moved away from token mining, and instead developed other businesses such as high-performance computing.
In November, Northern Data secured a €575 million debt financing facility from stablecoin specialist Tether Group, and in January, it completed the acquisition of a €400 million instrument from Tether, making Tether the anchor investor in Northern Data, according to a statement.
The company is using the money to buy the most sought-after Nvidia Corp. chips. About 20,000 of the H100 chips, one of the company’s most advanced AI chips, are scheduled to be deployed by the end of the summer.
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