Coatue Management invested $150 million in the Bitcoin miner Hut 8 Corp due to its capability to power generative AI applications with its high-performance computing.

Tech-focused investment manager Coatue Management has announced a significant $150 million investment into Bitcoin miner Hut 8 Corp, reflecting the ongoing interest in capitalizing on the artificial intelligence (AI) boom. The investment, facilitated through a convertible note, is part of a strategy to accelerate new compute capacity and seize opportunities within the ecosystem.

The convertible note will pay out 8% annually over a starting term of five years, with the potential for three one-year extension periods. This investment will be a senior unsecured obligation of Coatue Management, owned by billionaire Philippe Laffont. The transaction is expected to be completed on or before July 11, with Hut 8 filing the investment agreement with the United States Securities and Exchange Commission.

Laffont emphasized Hut 8's positioning to drive growth in the AI ecosystem, highlighting the importance of compute capacity in unlocking significant opportunities. Hut 8, one of the largest public miners based on computing power, currently boasts a market capitalization value of $1.1 billion.

In the crypto industry, Hut 8 was an early entrant into the high-performance computing business, sought after to power generative AI models and applications. This investment underscores the growing convergence between AI and crypto mining, with other miners like Core Scientific and TeraWulf also venturing into hosting data centers or striking AI-focused deals.

Coatue's partner Robert Yin highlighted the market's increasing appreciation for high-quality power assets, praising Hut 8's deep pipeline of attractive and expandable assets. Amid profitability challenges post-Bitcoin halving, mining firms like Hut 8 have been seeking ways to enhance competitiveness, including expanding self-mining operations and diversifying revenue streams.