Mr. Aydin Kilic reports

HIVE DIGITAL EXPANDS ITS AI GROWTH STRATEGY WITH THE PURCHASE OF 96 HIGH-PERFORMING GPUS AND GH200 SUPERCHIP

Hive Digital Technologies Ltd. has purchased 96 Nvidia H100 GPUs (graphic processing units) as part of its high-performance computing (HPC) and artificial intelligence (AI) strategy. These chips will operate in 12 HGX servers, each of which has 8xH100 GPUs with SXM connectivity. The company will receive eight of these GPUs in January, 2024, and 88 of them in March, 2024 (all amounts in U.S. dollars, unless otherwise indicated).

Hive's existing GPU business unit now has 2,600 GPUs listed with its HPC platform partners, which allow individual users to use Hive Nvidia GPUs for hours, days or weeks at a time, allowing Hive to focus on having a business-to-business model for its HPC GPU infrastructure. The company's beta site is on track, as it has suggested in previous press releases. Hive currently has $4-million of annual run rate revenue, over four times the revenue realized from its beta test.

Hive expects to have 2,800 GPUs listed with its HPC platforms by next week. Once these chips realize full market utilization, Hive expects to realize over $15-million of annual run rate revenue in January, 2024.

Additionally, the company is installing the infrastructure in January for another 2,000 GPUs. Therefore, once all 4,800 of these GPUs are listed and realize full market utilization, Hive expects to reach over $25-million of annual run rate revenue in Q1 2024, with robust gross margins.

By harnessing innovation, Hive's data centre teams have unlocked the potential of existing GPUs at their Boden, Sweden, facility. These GPUs, originally dedicated to mining, are now tapping into their capabilities for lighter HPC workloads. Frank Holmes, the executive chairman of Hive, said: "Hive has seen a healthy fourfold increase in daily revenue. In simple terms we have gone from $250,000 a quarter to $250,000 a month and expect to be $250,000 a week by March, 2024. The transformation has been achieved without large additional capital expenditures. Repurposing over 3,000 GPUs within their crypto mining facility has not only led to higher revenue but has also boosted profitability by approximately six times. Hive's focus on return on invested capital and commitment to optimization and resourcefulness continues to drive our progress in the ever-evolving world of data centres and cryptocurrency mining."

Thus, by the end of Q1 2024, with Hive's existing HPC GPU fleet, the new Nvidia H100 fleet and the Boden GPU fleet, Hive expects to realize a combined $30-million of annual run rate revenue with high gross margins.

A leader in AI infrastructure

On a related note, HPC Hive's AI team is currently working with strategic partners throughout North America to push the frontier of open-source AI large language models (LLMs).

In addition to this, Hive has secured two of the new Nvidia GH200 Grace Hopper, which is designed "to handle the world's most complex generative AI workloads, spanning large language models, recommender systems and vector databases. According to Nvidia, the new platform will be available in a wide range of configurations."

"With our proven track record of operating massive fleets of GPUs, Hive is in an excellent position to be a leader in the AI infrastructure revolution," says Mr. Holmes.

"Put simply, we have been building Hive's GPU and AI business unit to be the ultimate AI infrastructure pick-and-shovel play. As leaders in the tech sector, we believe we're undervalued as a company with both a highly efficient bitcoin mining operation and now a flourishing GPU compute business unit."

Aydin Kilic, president and chief executive officer, states: "I am delighted to announce we now have 2,600 GPUs live on our high-speed 100-gigabit ethernet (GbE) network operating in our Tier 3 data centres in Montreal, Que., and Stockholm, Sweden. By January, 2024, we expect to have 4,800 GPUs. Our team has designed and built an enterprise-grade network architecture in both locations, which allows us to realize much higher dollar per GPU per daily income. Now we are able to scale our income.

"While crypto mining is about being efficient and ensuring you're maximizing the use of energy allocated to ASIC hashing, operating GPUs for HPC applications requires a robust and redundant network and energy infrastructure. I have yet to see another company successfully transcend both realms with the scale and effectiveness of Hive.

"We are often asked about the allocation of our 38,000 Nvidia GPU fleet. Of these, 2,600 are now installed in Tier 3 data centres with 100 GbE high-speed network infrastructure for full HPC and AI workloads; approximately 3,000 have been repurposed in our existing Boden data center for lite HPC work; and the remaining chips are still used to mine altcoins, for which we receive payment in Bitcoin. As we install more SuperMicro servers, more of the GPUs for mining will be relocated to our Tier 3 facilities to be applied to AI and HPC workloads. That target is 4,800 GPUs in Tier 3 data centres for January, 2024," Mr. Kilic continues.

About Hive Digital Technologies Ltd.

Hive Digital Technologies Ltd. went public in 2017 as the first cryptocurrency mining company listed for trading on the TSX Venture Exchange with a sustainable green energy focus.

Hive is a growth-oriented technology stock in the emergent blockchain and high-performance computing industry. As a company whose shares trade on major stock exchanges, Hive is building a bridge between the digital currency and blockchain sectors and traditional capital markets. Hive owns state-of-the-art, green-energy-powered data centre facilities in Canada, Sweden and Iceland, where it endeavours to source green energy to mine digital assets such as bitcoin on the cloud. Since the beginning of 2021, Hive has held in secure storage the majority of its treasury of BTC derived from mining rewards. Hive's shares provide investors with exposure to the operating margins of digital currency mining, as well as a portfolio of bitcoin. Because Hive also owns hard assets such as data centres and advanced multiuse servers, the company believes its shares offer investors an attractive way to gain exposure to the cryptocurrency and high-performance computing space.

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