Arkon Energy raises $110 million to expand bitcoin mining capacity in the US and launch an AI cloud service in Norway - an opportunity not to be missed!

Arkon Energy closes $110 million private financing round to expand operations

Arkon Energy, a data center infrastructure company, has closed a $110 million private fundraising round to expand its operations, CEO Josh Payne announced exclusively to Toukiela.

Company expansion

The fund-raising was led by Bluesky Capital Management and included the participation of Kestrel 0x1 and Nural Capital.

The company launched in 2021 with a 5-megawatt site in Australia. It has since grown to over 130 megawatts and expanded to other countries and regions such as the USA and Europe.

"These sites attract both bitcoin miners and AI or machine learning clients with very high computational demands," said Payne. For the record, 1 megawatt can power between 400 and 900 homes a year, according to the Nuclear Regulatory Commission.

Acquiring new capabilities

Approximately $80 million will be used to acquire an additional 200 megawatts of capacity in new data centers in Ohio, North Carolina and Texas, as part of its plan to increase the company's total megawatts by 130% by mid-2024. This is in addition to Arkon's existing 100-megawatt facility in Ohio, which it purchased in June, Payne noted.

"The U.S. is an attractive market for us in many ways, largely due to huge domestic customer demand, a mature and robust energy industry with several flexible and deregulated markets, political and regulatory stability, and attractiveness to institutional investors," said Payne. "The U.S. has a large number of underutilized and neglected power generation assets connected to some of the world's lowest-cost sources of electricity, many of which are renewable."

Arkon's business model

Arkon's U.S. data center portfolio is primarily occupied by institutional-grade bitcoin mining companies, Payne said. "We're essentially a landowner who owns the underlying infrastructure assets."

Arkon's business model is to strategically acquire distressed data center assets worldwide. "The current and future demand for data center capacity of all types that we're seeing globally, but especially in the U.S., is unprecedented and monumental. The customers we serve have energy-hungry platforms that require an immense power infrastructure that is professionally managed and operated."

Artificial intelligence cloud services project

The remaining $30 million will be used to develop an artificial intelligence cloud service project in Arkon's data center in Norway to provide services to the generative AI and large language model training markets. "Over the past year, we have seen a profound acceleration in demand for generative AI and large learning model applications," he said.

However, there is an undersupply of specialized physical infrastructure to power the computers and servers behind most of these products. Arkon aims to bridge this gap by providing the underlying infrastructure layer on which the AI sector relies.

The growth of AI and bitcoin

Over the past year, there has been a "meteoric rise in AI applications", as well as potential growth and adoption of bitcoin in mainstream institutional markets as spot ETF approval looms, so specialized data centers like Arkon's are "poised to continue to grow exponentially", said Payne.