Bitcoin miner and data center operator IREN has completed the placement of $3 billion in convertible senior bonds.
The initial offering was set at $2.6 billion, but buyers fully exercised the option for an additional $400 million.
The company's net proceeds after fees amount to $2.96 billion.
The bonds carry a coupon rate of 1% per annum and mature in 2033. The conversion premium is set at 32.5%. The instrument was sold privately to institutional investors.
Approximately $201 million of the proceeds will be allocated to "limited call" transactions. This hedging mechanism is designed to protect shareholders from dilution when bonds are converted into shares.
The remaining funds will be used for working capital and general corporate purposes.
IREN is developing infrastructure for cloud computing and artificial intelligence. The company owns data centers and a GPU fleet in North America, Europe, and the Asia-Pacific region.
Miners Shift to AI
According to TheEnergyMag, the total hashrate of the Bitcoin network fell from 985 EH/s to 873 EH/s in the first quarter. This decline in activity is attributed to the largest mining companies pivoting towards infrastructure for artificial intelligence and high-performance computing (HPC).
The most significant drops were recorded by IREN (from 42.96 EH/s to 35.83 EH/s) and Keel Infrastructure (from 16.52 EH/s to 11.51 EH/s). The company Cipher Digital has completely halted mining at its Black Pearl site to repurpose it for AI needs.
Core Scientific has also confirmed plans to scale back mining operations. By the end of the year, the company will have no more than two sites for cryptocurrency mining. In the first quarter, Core Scientific wrote down assets worth $266.5 million, over half of which was related to mining equipment.
Some players have seized the opportunity to expand their market share. Riot Platforms increased its hashrate to 42.29 EH/s, while Bitdeer raised it to 50.26 EH/s. American Bitcoin expanded its capacity to 28.1 EH/s, using Bitcoin as collateral to purchase new devices instead of cash.
Previously, miners would shut down devices due to falling prices or high electricity costs, but now they are abandoning Bitcoin mining in favor of AI due to more stable profitability and financing conditions. Repurposed data centers for GPUs are unlikely to return to mining in the near future, according to TheEnergyMag.
As a reminder, TeraWulf reported $34 million in revenue for the first quarter, with approximately $21 million coming from HPC services.