Rumble, the video platform embracing free speech and a strong advocate for Bitcoin, is strategically maneuvering to significantly expand its reach into the burgeoning fields of artificial intelligence (AI) and high-performance computing (HPC).
On August 10th, the popular video-sharing site and cloud services provider announced its intention to acquire Northern Data, a prominent player in providing AI and HPC infrastructure. This strategic move signals Rumble’s serious ambition in the tech space.
The proposed acquisition will involve a stock swap. Rumble will issue newly created Class A shares to acquire all outstanding stock of Northern Data.
The proposed deal outlines that Northern Data shareholders will receive 2.319 shares of Rumble stock for each share of Northern Data they currently possess.
If the acquisition gains final approval, Northern Data shareholders are projected to gain approximately 33.3% ownership of Rumble. The final exchange ratio will be determined after a thorough due diligence process and negotiations between the two organizations.
Rumble’s Rationale Behind the Northern Data Acquisition
Rumble has stated that this acquisition is intended to solidify its position as a global leader in the AI cloud market.
To achieve this goal, Rumble intends to integrate Northern Data’s core businesses into its operational framework. This integration will include Ardent, Northern Data’s data center business, and Taiga, their GPU-as-a-service offering.
Taiga manages an extensive inventory of Nvidia hardware, reportedly featuring over 20,000 H100 and H200 GPUs.
Northern Data also owns and operates five data centers, boasting a combined power capacity of almost 850 MW. Notably, this includes a facility in Maysville, Georgia, that is anticipated to provide up to 180 MW when fully operational.
During Rumble’s second-quarter earnings report, CEO Chris Pavlovski emphasized the company’s dedication to expanding its cloud and AI capabilities to support the continued development of a free and open internet.
He further stated:
“Rumble is embarking on a new phase marked by aggressive expansion. While ambition has always been a part of our DNA, we are now uniquely positioned to pursue bold initiatives, not just to compete with, but to outpace the leading tech companies.”
Tether’s Role in Facilitating the Agreement
Tether, the organization responsible for issuing the USDT stablecoin, holds a significant position in this potential acquisition.
Over the past year, Tether has strategically invested substantial capital in both Rumble and Northern Data as a component of its overarching diversification strategy.
Tether currently controls 54% of Northern Data’s outstanding shares. They intend to transfer their entire stake to Rumble in exchange for newly issued Class A shares, adhering to the same exchange ratio extended to all other shareholders of the AI firm.
Following the completion of the transaction, Tether is anticipated to emerge as Rumble’s largest shareholder of Class A common stock. However, Pavlovski will retain majority voting control.
In addition, Tether intends to execute a multi-year agreement for GPU purchases with Rumble and modify its current loan arrangement with Northern Data, enhancing the financial agility of the combined entity.