Hive Blockchain, a prominent Bitcoin mining farm, will soon allow customers to access its data centers for training large language AI models. The company claims that its solution offers superior privacy compared to competitors like OpenAI’s ChatGPT.
During an earnings call last Friday, Hive’s CEO and President, Aydin Kilic, shared the company’s intentions. He stated that companies are becoming more cautious about uploading sensitive client data to OpenAI, which has a public large language model. Hive aims to provide privacy through their Hive Cloud service, allowing companies to retain ownership of their data while running AI compute workloads on their graphics processing unit (GPU) bank.
Following this announcement, Hive saw a 2% increase in shares before the market closed on Friday. The interest in AI has grown among miners as mining economics affects profitability, and some farms have even faced bankruptcy. On the other hand, the AI sector is thriving and attracting investors worldwide.
However, it remains to be seen if miners can effectively compete with tech giants like Amazon Web Services and Google. These companies benefit from economies of scale and decades of experience in high-quality customer-oriented data centers.
Large language models are capable of both understanding and generating human language using probabilistic calculations. These models are trained using graphics processing units, which were initially developed for faster image processing but have proven to be well-suited for AI workloads.
Hive has a massive fleet of 38,000 GPUs, initially created for Ethereum mining. While some of the GPUs have been repurposed for mining altcoins, many are available for rent-as-a-service, supporting the company’s cloud offering. If GPUs are offered for AI training, Hive expects to generate approximately $1 million in revenue per year.
Hive’s fiscal year, which ended on March 31st, reported $106.3 million in revenue and a gross operating margin of $50.4 million, representing around 47% of total revenue. However, these earnings are approximately half of the previous fiscal year’s $211.1 million, which had a gross operating margin of 78% of revenue. The report also includes a net loss of $236.4 million due to non-cash charges, including depreciation, equipment impairment, and deposit impairment.
Overall, Hive Blockchain’s decision to offer its data centers for AI training with enhanced privacy is expected to attract customers looking to protect sensitive data. This move demonstrates the company’s efforts to adapt to market dynamics and diversify its revenue streams beyond traditional mining operations.
