Bit Digital Inc (NASDAQ:BTBT) shares surged more than 37% after the digital assets and AI infrastructure firm announced it has finalized a contract expansion with a major high performance computing (HPC) customer bringing the total contract value to $275 million.
The company said under the expanded agreement it will supply the existing customer with an additional 2,048 GPUs over three years.
It will supply 4,096 GPUs for the respective three-year periods, amounting to total revenue of $275 million or $92 million on an annual basis.
To fulfil the contract, Bit Digital said it has placed a purchase order for 256 servers with Dell Technologies, an authorized NVIDIA OEM, equipped with 2,048 NVIDIA HGX H100 GPUs, along with related equipment to be delivered in July.
The servers will be deployed in Iceland at a data center where the company’s existing AI servers are located and are anticipated to start generating revenue in August.
“This agreement significantly contributes to our goal of reaching a $100 million annualized revenue run-rate by the end of 2024, bringing us to over 90% of this target,” Bit Digital CEO Sam Tabar said in a statement.
“Our primary objective in the HPC business is to execute effectively for our customers and help them achieve their AI ambitions. We continue to see a robust growth trajectory for this segment and look forward to scaling even further as the year progresses.”
The company intends to finance the deal with a mix of cash and digital assets on its balance sheet. It has chosen to enter into a a sale-leaseback agreement with a third-party entity for 1,024 GPUs which will reduce its capital outlay.
Bit Digital has Bitcoin mining operations in the US, Canada, and Iceland and has established a business line, Bit Digital AI, that offers infrastructure services for AI applications.