Summary
- HIVE's BUZZ HPC subsidiary has finalized a $220 million, three-year GPU cloud agreement with Bell Canada and Cohere, involving 2,304 NVIDIA Grace Blackwell GPUs at Bell's facility in Merritt, BC.
- This contract pushes HIVE's high-performance computing revenue beyond $100 million, with an anticipated $70 million in new annual recurring revenue once operational.
- On Thursday, HIVE's stock rose over 7% on the TSX as the company continues its transition from Bitcoin mining to AI infrastructure.
HIVE Digital Technologies saw its stock increase by more than 7% on Thursday following the announcement of a significant $220 million GPU cloud deal with Bell Canada and AI firm Cohere, marking its largest contract to date and a clear indication of its shift towards AI infrastructure.
The agreement, which spans three years, is facilitated through HIVE's BUZZ High Performance Computing subsidiary and includes the deployment of 2,304 NVIDIA Grace Blackwell GPUs—specifically designed for advanced AI training and inference—at Bell's specialized data center in Merritt, British Columbia.
Cohere, known for developing AI systems for enterprises and governmental bodies, will utilize this computing framework to support its platform for Canadian clients.
The term "sovereign AI" is frequently mentioned, referring to AI that operates on infrastructure within a nation's borders using locally controlled data, which is particularly important for government clients. Canada has been proactive in this area, committing over $2 billion to domestic AI computing as part of its Sovereign AI Compute Strategy, including a $240 million investment in Cohere. This contract serves as the foundational infrastructure for that initiative.
Cohere is a suitable partner for this collaboration, as it is one of the few companies developing foundational models—the core AI technology that underpins enterprise chatbots, government document processing, and more. The company recently announced a merger with Germany's Aleph Alpha, valuing the new entity at approximately $20 billion. Bell and Cohere have been collaborating since July 2025, and this contract provides the necessary computing infrastructure for their partnership.
“Canada was at the forefront of modern artificial intelligence. What we've been missing is not talent, but the industrial infrastructure to scale that talent commercially before others do,” stated Frank Holmes, executive chairman of HIVE Digital Technologies. “This collaboration with Bell and Cohere marks a pivotal moment. BUZZ HPC is the GPU factory that will turn Canada’s AI ambitions from mere political promises into actual productive national assets.”
For HIVE, which reported $278.3 million in Bitcoin mining revenue in its last quarter, this marks a significant step in its ongoing transition that began in 2022.
The company initiated its shift towards AI by reallocating GPU resources away from crypto mining, securing a deal with Dell for new GPUs last November and completing a $115 million convertible note offering in April to finance hardware acquisitions. HIVE is not alone in this strategy; Keel Infrastructure, previously known as Bitfarms, also divested its last mining site in Paraguay in April and is following a similar path.
Returns from crypto mining can be unpredictable and become more challenging as competition increases for block rewards. This situation worsens during crypto downturns when rewards diminish as the value of crypto assets declines while operational costs rise or remain steady.
Conversely, demand for AI computation is rapidly increasing, with clients, particularly government entities, entering multi-year contracts at fixed rates. While some might consider this a trade from one bubble to another, it is backed by government support.
Once the deployment is operational—anticipated between late 2026 and early 2027—HIVE expects to generate approximately $70 million in new annual recurring revenue, in addition to the $35 million currently generated from its existing GPU operations. The company's contracted high-performance computing revenue is now projected to exceed $100 million.
Furthermore, HIVE is working on a larger endeavor: a 320-megawatt AI data center in the Greater Toronto Area, intended to accommodate over 100,000 Nvidia GPUs at full capacity.
At full operation, this facility is expected to yield around $360 million in annual recurring revenue, with a broader goal of achieving $660 million in annualized high-performance computing revenue by the end of 2028.