Arkon Energy Secures $110M Investment for Expanding U.S. Bitcoin Mining Capacity and Introducing AI Cloud Service in Norway

Arkon Energy, a data center infrastructure company, closed a $110 million private funding round to expand its operations, the company’s CEO Josh Payne shared exclusively with TechCrunch. “These sites appeal to both bitcoin miners and AI [or] machine learning clients who have very high power computing demands,” Payne said. “We are essentially a landlord who owns the underlying infrastructure assets.”Arkon’s business model focuses on strategically acquiring distressed data center assets across the globe. “The current and future demand for data center capacity of all types that we are seeing globally, but especially in the U.S., is unprecedented and monumental. Arkon aims to fill that gap by providing the underlying infrastructure layer that the AI sector relies on.

Arkon Energy, a prominent player in the data center infrastructure industry, recently announced the successful closure of a whopping $110 million in private funding. This massive influx of capital will allow the company to expand its operations in a significant way, according to CEO Josh Payne, who shared the news exclusively with TechCrunch.

The funding round was spearheaded by Bluesky Capital Management and saw participation from Kestrel 0x1, Nural Capital, and Florence Capital. It is a testament to the company’s success since its launch in 2021, when it started with a modest 5-megawatt site in Australia. With the latest funding, the company has now grown to more than 130 megawatts of capacity and has expanded its operations to multiple countries, including the United States and Europe.

“These sites appeal to both bitcoin miners and AI [or] machine learning clients who have very high power computing demands,” Payne explains.

For context, 1 megawatt can power between 400 to 900 homes a year, according to the Nuclear Regulatory Commission.

The company plans to utilize a portion of the funding – approximately $80 million – to acquire an extra 200-megawatt capacity across new data centers in Ohio, North Carolina, and Texas. This will result in a staggering 130% increase in the company’s total megawatts by mid-2024. Additionally, Payne notes that the company had previously acquired a 100-megawatt facility in Ohio in June.

“The U.S. is an attractive market for us in many ways,” Payne adds. “Largely because of the enormous domestic customer demand, a mature and robust energy industry with several flexible and deregulated markets, political and regulatory stability, and attractiveness to institutional investors.”

He also elaborates on the abundant availability of stranded, underutilized power generation assets in the U.S. that are connected to some of the lowest-cost electricity sources in the world, many of which are renewable.

Payne further reveals that the company’s U.S. data center portfolio primarily consists of institutional-grade bitcoin mining companies, emphasizing, “We are essentially a landlord who owns the underlying infrastructure assets.”

Arkon adopts a unique business model, focusing on strategically acquiring distressed data center assets across the globe. According to Payne, this approach is justified by the unprecedented and monumental demand for data center capacity globally, particularly in the U.S. The company’s customers operate energy-intensive platforms that require professionally managed and operated electrical infrastructure.

The remaining $30 million from the funding round will be channeled towards the development of an artificial intelligence cloud service project at Arkon’s data center in Norway. This project aims to cater to the rapidly growing generative AI and large language model training markets. Payne elaborates, “Over the last year, there has been a profound market acceleration in demand for generative AI and large learning model applications.”

He also points out a pressing issue of undersupply of specialized physical infrastructure to power the computers and servers behind most AI products. With Arkon’s focus on providing the underlying infrastructure layer that the AI sector relies on, the company aims to bridge this gap.

Payne predicts a meteoric rise in AI applications and potential growth and adoption in mainstream institutional markets for bitcoin as a spot ETF approval looms. This makes specialized data centers like Arkon’s “poised to continue scaling exponentially.”

Avatar photo
Kira Kim

Kira Kim is a science journalist with a background in biology and a passion for environmental issues. She is known for her clear and concise writing, as well as her ability to bring complex scientific concepts to life for a general audience.

Articles: 867

Leave a Reply

Your email address will not be published. Required fields are marked *