Bit Digital, Inc. Announces Binding Term Sheet with New HPC Customer Representing a More Than $700 Million Revenue Opportunity Over Five-Year Term

Rhea-AI Summary

Bit Digital (Nasdaq: BTBT) has signed a binding term sheet with Boosteroid Inc. for its high-performance computing (HPC) business. The initial agreement includes a purchase of GPU servers with a five-year service duration, expected to generate $13 million in revenue over the term. Boosteroid has options to expand up to 50,000 GPU servers, representing a potential $700 million revenue opportunity for Bit Digital. The initial deployment, featuring AMD EPYC 4th Gen CPUs and RX7900XT GPUs, is planned across 10+ data centers in the U.S. and Europe, starting within 2-3 months. This partnership aims to enhance Boosteroid's position in the global cloud gaming market while expanding Bit Digital's HPC business into new end-markets.

Positive

• Initial agreement expected to generate $13 million in revenue over five years
• Potential for up to $700 million in revenue if Boosteroid expands to 50,000 GPU servers
• Expansion into new end-market for HPC offerings
• Deployment planned across 10+ data centers in the U.S. and Europe

Negative

• Full revenue potential dependent on Boosteroid's deployment plans and market conditions
• Agreement conditional upon further diligence, reviews, and approvals

Insights

Financial Analyst

The binding term sheet between Bit Digital and Boosteroid represents a significant potential revenue stream for Bit Digital. The initial order of $13 million over five years is substantial, but the real game-changer is the scalability option. If Boosteroid exercises its full option for 50,000 GPU servers, it could translate to a whopping $700+ million in revenue over five years. This deal could potentially transform Bit Digital's financial outlook.

However, investors should note that this is still a term sheet, not a finalized agreement. The execution depends on due diligence, approvals and market conditions. The phased deployment over five years also means the full revenue impact won't be immediate. Still, this deal positions Bit Digital as a serious player in the HPC market, potentially diversifying its revenue streams beyond digital assets.

Tech Expert

This partnership showcases a significant technological collaboration in the cloud gaming sector. The use of AMD's EPYC 4th Gen CPUs and RX7900XT GPUs, customized by ASUS, indicates a high-performance setup tailored for cloud gaming demands. The planned deployment across 10+ data centers in the U.S. and Europe suggests a robust, low-latency infrastructure essential for cloud gaming success.

What's particularly interesting is the scale of the potential deployment - up to 50,000 GPU servers. This level of infrastructure could position Boosteroid as a major player in the cloud gaming market, potentially rivaling established services. For Bit Digital, this deal demonstrates their capability to provide and manage large-scale, high-performance computing solutions, opening doors to similar partnerships in the future.

Market Research Analyst

This deal signals a growing trend in the cloud gaming market. With major tech giants already invested in this space, Boosteroid's ambitious expansion plans indicate there's still room for growth and competition. The cloud gaming market is projected to grow significantly, driven by improvements in internet infrastructure and changing consumer preferences.

For Bit Digital, this partnership represents a strategic pivot. Known primarily for its involvement in digital assets, this move into HPC for cloud gaming diversifies its business model. It's a smart strategy, especially given the volatility in the cryptocurrency market. If successful, this could reposition Bit Digital as a key infrastructure provider in the burgeoning cloud gaming industry, potentially leading to a revaluation of the company by investors.

NEW YORK, Aug. 19, 2024 /PRNewswire/ -- Bit Digital, Inc. (Nasdaq: BTBT) ("Bit Digital" or the "Company"), a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York, announced today that it has signed a binding term sheet with Boosteroid Inc. ("Boosteroid"), a new customer for its high-performance computing ("HPC") business.

Key Highlights

• Initial Agreement: Upon signing a master service agreement ("MSA"), Boosteroid will place an initial purchase for a starting quantity of GPU servers with a five-year service duration. Bit Digital's entry into a MSA is conditioned upon further diligence of Boosteroid, customary legal and business reviews, internal approvals, and execution of an acceptable MSA.
• Revenue Impact: This initial order is expected to generate approximately $13 million in revenue to Bit Digital over the five-year term, or approximately $2.6 million per year.
• Scalability: Bit Digital will provide Boosteroid with options to draw down additional servers in multiples of 100, up to a total of 50,000 GPU servers within five years after signing the MSA, depending on their deployment plans. The entire 50,000 GPU deployment represents an aggregate revenue opportunity to Bit Digital in excess of $700 million over the five-year term, depending on the deployment plan and subject to market conditions.
• Technology and Deployment: The initial purchase includes GPU-servers based on AMD EPYC 4th Gen CPUs and RX7900XT GPUs, customized by ASUSTeK Computer Inc. ("ASUS") and AMD for Boosteroid. Deployment is planned across a network of more than 10 data centers in the U.S. and Europe. The initial deployment is scheduled to begin over the next two to three months.

Sam Tabar, Bit Digital's CEO, commented: "We are excited to expand our HPC business and provide mission-critical computing solutions to Boosteroid, a customer in a new end-market for our HPC offerings. We are impressed with Boosteroid's business model and look forward to supporting their ambitious growth plans. We aim to deliver exceptional service quality and execution, laying the foundation for a long-term and growing partnership between our companies."

Ivan Shvaichenko, Founder and President of Boosteroid, commented: "This collaboration between Boosteroid and Bit Digital enhances our existing partnerships with AMD and ASUS, creating a powerful synergy that will drive us toward our goal of becoming the leader in the global cloud gaming market. By leveraging the advanced computing power provided by Bit Digital and the cutting-edge technology from AMD and ASUS, we are poised to deliver an unparalleled gaming experience to millions of users worldwide. This partnership not only strengthens our GPU-based infrastructure, already one of the widest in the world, but also sets the foundation for long-term innovation and growth within the cloud gaming industry."

About Boosteroid

Boosteroid is the world's third-largest cloud gaming provider, following Microsoft and Nvidia. With a GPU-based infrastructure network spanning 22 data centers and 10 more expected to launch by the end of 2024, Boosteroid serves over 5.7 million users across Europe, North America, and South America. It partners with major brands like Google for cloud gaming on Chrome OS, and collaborates with Microsoft, Samsung, LG, Hisense, Philips, Sharp, etc. Boosteroid uses custom hardware solutions designed by ASUS, AMD, and other companies tailored specifically for their platform.

About Bit Digital

Bit Digital, Inc. is a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has established a business line, Bit Digital AI, that offers infrastructure services for artificial intelligence applications. For additional information, please contact ir@bit-digital.com or visit our website at www.bit-digital.com.

Investor Notice

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2023. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital's production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

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SOURCE Bit Digital, Inc.

FAQ

What is the potential revenue for Bit Digital (BTBT) from the Boosteroid agreement?

The initial agreement is expected to generate $13 million over five years, with potential for up to $700 million if Boosteroid expands to 50,000 GPU servers.

When is the initial deployment of GPU servers for Boosteroid scheduled to begin?

The initial deployment is scheduled to begin within the next two to three months from the announcement date of August 19, 2024.

What type of GPU servers will Bit Digital (BTBT) provide to Boosteroid?

Bit Digital will provide GPU servers based on AMD EPYC 4th Gen CPUs and RX7900XT GPUs, customized by ASUS and AMD for Boosteroid.

How many data centers will be involved in the deployment for Boosteroid?

The deployment is planned across a network of more than 10 data centers in the U.S. and Europe.