Rumble video platform seeks to expand AI cloud computing capabilities through a full stock swap transaction.
Rumble, YouTube's competitor and one of the technology companies holding Bitcoin, has announced plans to acquire two key business segments of Northern Data – a German company controlled by stablecoin issuer Tether. This $1.17 billion transaction marks an important step in Rumble's expansion strategy into cloud computing and artificial intelligence.
According to Monday's announcement, Rumble proposes to acquire Northern Data's Taiga cloud business and large-scale Ardent data center through a full stock swap transaction. This is a move to enhance competitive capabilities in the booming AI cloud computing market, where GPU services and high-end computing infrastructure are increasingly in demand.
Simultaneously, Northern Data also announced the sale of its Peak Mining cryptocurrency mining segment to private Bitcoin mining company Elektron Energy for $235 million, indicating a strategic restructuring to focus on core business segments.
Support from Tether and long-term commitment
A notable aspect of this transaction is the strong support from Tether, Northern Data's owner. Rumble stated that after the transaction is completed, Tether will become an important customer with a commitment to purchase GPUs in the coming years. This not only ensures stable revenue for Rumble but also strengthens the strategic partnership between the two parties.
This relationship was built last year when Tether announced plans to invest $775 million in the Rumble platform, starting with a $250 million cash injection. Tether, based in El Salvador, is the issuer of USDT – the fourth-largest stablecoin by market capitalization, pegged and backed by the USD.
Rumble, a Canadian company listed on Nasdaq with the ticker RUM, has positioned itself as an alternative video sharing platform to YouTube, particularly attracting conservative content creators in the US through supporting freedom of speech. The platform has also demonstrated its commitment to digital assets by incorporating Bitcoin into its balance sheet since last year and currently holds 210.8 BTC, equivalent to over $25 million at current prices.
Although RUM stock increased by about 3% in Monday's trading session after the announcement, the stock price has still dropped approximately 34% since the beginning of the year, reflecting the general challenges faced by technology companies in the current market environment.
