Premarket trading saw a sharp increase in Bitdeer’s share price following the unveiling of details regarding a significant agreement for an AI data centre in Norway.
The blockchain company, Bitdeer, announced a long-term lease deal with Volta, involving $4.7 billion over a 16-year initial term. The project is situated at the Tydal campus within Norway and comprises the leasing of 121 IT megawatts of computing capacity across four data halls. Volta Tydal AS will be responsible for managing this capacity under the agreement.
Analyst Mark Palmer, from Benchmark Equity Research, provided revenue estimates linked to the project. He reportedly suggested an average annual revenue projection of $2.4 million per IT megawatt with a 3% annual escalation clause. Palmer’s calculations further indicated projected net operating income margins of approximately 90%.
The agreement includes an eight-year renewal option, potentially increasing the contract value to roughly $8 billion across its total duration of 24 years. Affiliates of JPMorgan and another financial institution are providing credit support, backing Volta’s obligations with letters of credit totalling $1.3 billion. These letters of credit represent approximately 28% of the base-term agreement’s value.
Bitdeer retains the right to terminate the contract should Volta fail to meet specified milestones aligned with the credit backstop arrangement. Furthermore, a firmly committed portion of the contract is estimated at four and a half years, as calculated by Palmer. The total firm commitment extends to $2.7 billion after ten years, considering Volta’s option for termination.
The announcement reflects significant investment in AI computing infrastructure and represents a key milestone for Bitdeer’s operations within the expanding field of artificial intelligence data centres. The arrangement involves a substantial financial undertaking with potentially significant recurring revenue streams.
Written by James Tobias
Bitcoin Desk
