Hive Digital Technologies (HIVE) continues to convert from pure play crypto miners to high performance computing (HPC) service providers.
What began as a fleet of 400 GPUs managed by two employees is now expanding towards an annual revenue of $100 million. The company is driving this growth by leveraging advanced AI chips including Nvidia’s H100 and upcoming Blackwell GPUs.
Co-founder and executive chairman Frank Holmes and CEO Aydin Killick detailed Hive’s strategy in an exclusive interview with Cointelegraph at the Nasdaq Stock Exchange headquarters in New York City.
Executives detailed Hive’s continued diversification into AI. Like other miners, the Hive identified AI as a potentially profitable use of energy over Bitcoin (BTC) when measured kilowatt-hour. This insight has led several crypto mining companies to incorporate AI processing into their infrastructure, particularly against declining profitability after half of 2024.
According to Holmes, Hive was the first public miner to pivot into HPC in 2022. By the second quarter of 2023, HPC’s revenues will first appear on the company’s income statement, and will then grow to an annual run rate of $20 million, with the goal of reaching $100 million.
Still, given the ongoing “electricity and land scrambling,” Killick said, there is a need to be careful approach to scaling HPC capacity.
In response, the Hive recently acquired the site near Pearson International Airport in Toronto, Canada, securing a strategic location that can scale up to 7.2 megawatts of HPC power.
The Toronto choice was intentional as it places the hive at the heart of a robust pipeline of AI talent, including its connections with the University of Toronto and the Canadian AI ecosystem.
Despite the capital shift, the Hive maintains its total mining margin quarterly, even during the sharp decline in Bitcoin in 2022. Killick believes this in the Hive’s tightly operated structure and ongoing investment in hardware, achieving a low global energy efficiency of 17.5 Joules (J/TH) per Terrahash.
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Hivestock still functions as a bitcoin proxy
According to Kilic and Holmes, despite pivoting into a higher margin market, such as Hive’s high-performance computing, its inventory continues to act like a Bitcoin proxy, limiting its valuation.
Following the company’s deadline bell ceremony on Nasdaq, Hive stock posted conservative earnings, recovering 31% in the past month. However, since the start of the year, stocks have fallen 27%, trading around $2.23 with a market capitalization of around $475 million.
Despite this volatility, analysts have issued positive coverage primarily for the hive, indicating that the stock is undervalued at its current level. In February, HC Wainwright issued a “buy” rating with a $10 price target. Recently, Canaccord Genuity has repeated its “buy” ratings and assigned a $9 target.
Rosenblatt Securities analyst Chris Brendler also looks at the upside, citing Hive’s expansion of HPC footprint and its growth operations in Paraguay.
As reported by Cointelegraph, Hive acquired the Paraguay facility from Bitfarms in January for $85 million. Killick later told Cointelegraph that Hive saw Paraguay as a long-term investment and touting the country’s low-cost hydroelectric power generation, geopolitical stability and government support.
Bitcoin mining M&A activities are increasing
While Hive has expanded beyond its original mission as a Bitcoin miner, BTC is still considered a long-term strategic asset.
Earlier this month, Hive announced that its daily Bitcoin production has doubled to six or more BTC. According to Holmes, that number is expected to double again to 12 btc on Thanksgiving, accounting for around 3% of the global Bitcoin network.
Related: In minor equity dilution, debt reliance, Hive doubles its BTC HODL strategy
In January, Cointelegraph reported that several miners were adopting Bitcoin financial strategies to leverage anticipated price increases, strengthen their balance sheets and leverage hedges against currency risk. This trend emerged with a broader wave of industrial integration that began in mid-2024, driven in part by post-Herning’s economy and pivots into AI.
M&A transactions have been steadily increasing since the second quarter of 2024, according to data from Architecture Partner.
Among mining and staking companies, there were 10 transactions of $188 million in the first quarter of 2025. The previous quarter included eight transactions worth $266 million.
The most notable merger was finalised this month, with CoreWeave winning Core Scientific in all-stock transactions worth $9 billion. The acquisition comes more than a year after CoreWeave first expressed interest in Bitcoin Miners.
CoreWeave was originally a crypto miner before moving to an AI infrastructure provider, but the acquisition of Core Scientific doesn’t necessarily mean it’s back in mining.
When announcing its central acquisition of scientific acquisition, CoreWeave expressed its intention to reuse the assets of HPC miners or sell its crypto mining business entirely.
Other notable M&A deals in the mining industry include Marathon Digital’s acquisition of the Generate Capital Mining site, Hut 8’s Validus Power Assets, CleanSpark’s Griid Infrastructure, and Bitfarms’s base digital mining.
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