Galaxy Digital (ticker: GLXY) has successfully raised $1.4 billion through debt financing to retrofit and expand its Helios datacenter in West Texas. The substantial funding is not intended for bolstering a cryptocurrency treasury but is earmarked for a strategic pivot towards supporting artificial intelligence (AI) and high-performance computing (HPC) operations.
This move will enable Galaxy to fulfill a long-term, 15-year lease agreement with CoreWeave (ticker: CRWV), a prominent cloud computing company. “This project is a key step in diversifying Galaxy’s business model as we expand beyond crypto and into the broader AI infrastructure space,” stated Galaxy CEO Mike Novogratz.
The debt facility, arranged with Deutsche Bank acting as the initial lender according to a Securities and Exchange Commission filing, has a 36-month term and is secured by the assets of the initial phase of the Helios buildout. The financing was provided at an 80% loan-to-cost ratio, with Galaxy contributing an additional $350 million in equity for the project.
Under the agreement, Galaxy will provide 800 megawatts of critical IT load to host CoreWeave’s AI and HPC operations at the Helios facility. CoreWeave, which raised $1.5 billion in its March initial public offering, will be the sole AI/HPC tenant.
This strategic shift aligns with a broader trend of Bitcoin miners diversifying into high-performance computing, a move influenced by last year’s Bitcoin halving and the escalating demands of the AI industry. CoreWeave itself began as a cryptocurrency miner before transitioning in 2019 to offer cloud-based GPU services, capitalizing on its inventory of NVIDIA chips.
Galaxy projects that the partnership with CoreWeave will generate over $1 billion in average annual revenue throughout the 15-year lease, assuming the facility is fully utilized.
While a specific timeline has not been disclosed, Galaxy has plans for a second phase of development for the Helios facility, having signed an additional lease with CoreWeave in August. If fully developed, the company estimates the datacenter could support up to 3.5 gigawatts of power. Galaxy originally acquired the Helios facility from Argo Blockchain in 2022 for $100 million, a deal that included a $35 million loan and helped the original builder avert bankruptcy.
In May, Galaxy achieved a dual-listing on the Nasdaq, having previously gone public on the Toronto Stock Exchange in 2020. According to The Block’s price page, GLXY shares were trading at $36, marking a 7% decrease on the day of the announcement. The company is also reportedly exploring the tokenization of its shares.
