Russian Crypto Mining Firm Intelion Makes $135 Million AI Investment

2024-06-11 19:00:06

Tim Alper

Last updated:

June 11, 2024 23:00 EDT | 3 min read

Russian crypto mining firms are continuing to spend big on new projects, with the Bitcoin mining player Intelion unveiling a $135 million AI investment.

The Intelion business group, one of the largest industrial mining operators in Russia, said it would spend the money on “server equipment for AI computing.”

Per the Russian media outlet RBC, the company will use its “new capacities” as “part of” a new “data center” project in the Samara Oblast.

The Samara Oblast in Russia. (Soucre: Stasyan117 [CC BY-SA 4.0])## Russian Crypto Mining Firms Ready to Spend Big

Intelion says that to “implement” its new AI project, it will spin off its “high-performance computing business” into a subsidiary.

This new firm will be named Intelion Cloud. It will reportedly focus on “developing a group of companies in the AI field.” It will also “provide clients with access to high-performance computing power.”

Domestic crypto mining companies have grown quickly as global crypto markets have boomed.

In addition, they have also struck deals with energy providers in parts of Russia with cooler climates and low electricity fees.

The interior of an Intelion crypto mining data center. (Source: Intelion Mining/YouTube)This rapid expansion has seen the industry branch out into AI-related industries. Players have also offered Moscow access to brand-new data centers, hoping this will lead regulators to look favorably upon their industry.

Moscow is hoping to launch a nationwide IT development project. And crypto mining players say their data centers will help the government achieve its goal.

Could AI Become a New Money Spinner for Crypto Miners?

Russian experts claim that AI development will spike energy consumption figures. They think that by 2035, Russian electricity consumption in the AI sector “will reach 4.5 GW.”

Experts say that “new infrastructure and advanced GPUs” are urgently needed to help facilitate the rise of the domestic AI field. Maxim Vyaznikov, Intelion Cloud’s inaugural CEO, said:

“Industrial crypto mining allows us to create and maintain large-scale infrastructure designed for the future. It will also help recoup investments due to the high current demand for computing power.”

The firm said that the “first phase” of its new Samara data center will come online “in the fourth quarter of 2024.”

Additionally, the company said that a further $48.2 million would be spent on the construction of the data center “in the next two and a half years.”

Russia’s economy is growing, but can it last?

— BBC News (World) (@BBCWorld) June 6, 2024

Miners Branch out in Russia – and Beyond

Intelion Cloud says it “already has” a range of modern servers. These reportedly include “advanced” Nvidia A100 series graphics accelerators.

The mining player appears keen to provide “per-second pricing” options for AI firms who need to rent servers.

RBC noted that the growing demand for electricity “for the uninterrupted operation of AI s” was creating “additional income for Bitcoin miners.”

Miners in the United States have launched similar projects. These include the American mining firm Core Scientific.

Earlier this month, Core Scientific announced a $3.5 billion, 12-year agreement with the cloud service provider CoreWeave.

Tonight, we announced that Core Scientific will be providing an additional ~200 MW of infrastructure to host @CoreWeave #HPC services.

– ~200 MW of infrastructure for HPC compute
– Estimated to generate total cumulative revenue for Core Scientific of over $3.5 billion during the… pic.twitter.com/GWRaJuJdZs

— Core Scientific (@Core_Scientific) June 4, 2024

The deal will see the miner supply some 200 MW to AI projects, reportedly netting the miner an average annual income of some $290 million.

Miners Hope for Regulatory Breakthrough

The sector is hoping for a breakthrough with regulators as it continues to push for the legalization of industrial mining.

Government officials say they support moves that would grant mining recognition as a form of “entrepreneurship.”

In February, the Russian crypto mining firm BitRiver announced it was building a new 100 MW data center in the southern republic of Buryatia.

Many Russian crypto mining players are taking care to build their new data centers outside more popular Bitcoin industry hubs such as Irkutsk.

While Samara has hot summers, its winters are cold. The region is famous for its oil refining and petrochemical industries.

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