When Mike Novogratz, CEO of Galaxy Digital (GLXY), purchased Argos’ Helios Knowledge Heart in late 2022 on the depths of Crypto winter after FTX, the corporate thought it was rescued a determined Bitcoin (BTC) miner on the point of chapter.
Nonetheless, this was earlier than ChatGpt turned mainstream. Novograts and co. Because of the explosive progress of large-scale language fashions (LLM), this information middle did not suppose it could turn into a strategic asset because the rising synthetic intelligence (AI) trade is in search of extra information middle house.
As an analyst at Rittenhouse’s analysis outlined in a brand new memo, Galaxy’s Lacky Discover incited fully incited the corporate’s transfer from BTC mining, nevertheless it might now be probably the most advantageous pivot of cryptography.
Rittenhouse’s analysis is an extended galaxy digital $glxy $brphf
Galaxy’s flagship information middle Helios believes it is going to generate $1.7 billion in EBITDA and $32 billion in inventory worth within the brief time period.
Our full paper may be present in PDF at https://t.co/mz3jww1cyd pic.twitter.com/4jnhn10oyv.
– Rittenhouse Analysis (@rhouseresearch) Might 15, 2025
Rittenhouse analysts argue that AI information facilities characterize a significantly better enterprise mannequin than BTC mining. It is because it generates secure long-term money move with minimal steady capital expenditure, in distinction to the volatility and capital power of Bitcoin mining.
BTC mining revenues will lower by roughly 50% each 4 years as a result of scheduled halving. In impact, miners’ play is the worth of BTC and the flexibility of semiconductor fabs and designers to develop extra environment friendly chips, which is quite a lot of variables for buyers.
In distinction, AI information facilities like Galaxy’s Helios services earn constant margin income via long-term triple web leases to long-term triple web leases (massive cloud computing suppliers) with out the necessity for ongoing funding in mining tools.
“The Galaxy stumbled upon Helios because of success,” Rittenhouse wrote of their notes. Rivals reminiscent of riot platforms and crypto mining try to make “rewrite historical past” public, retrospectively suggesting that their enterprise is at all times wider than BTC mining, however analysts say, “Actually, these miners weren’t planning on doing something aside from mining BTC till ChatGPT was launched.”
A wider trade change?
The Galaxy migration displays a broader development as BTC miners attempt to pivot in direction of AI and cloud computing.
Nonetheless, analysts spotlight the nice advantages of Galaxy as a result of its glorious stability sheet ($1.8 billion in web money and funding), profitable execution information, and reliability established via CoreWeave leases.
Whereas some have raised issues about CoreWeave’s creditworthiness and have brought on Galaxy’s inventory to commerce at a large low cost, Rittenhouse analysts say these fears are closely exaggerated and spotlight CoreWeave’s extraordinary income stability.
Analysts emphasize that CoreWeave’s obligations are fastidiously constructed via lottery facility loans which might be particularly used to fund infrastructure immediately linked to safe buyer contracts and are particularly utilised to dramatically cut back the danger of default.
Rittenhouse additionally notes that the Galaxy has fully invaded the AI ​​and isn’t at present uncovered to mining.
“Galaxy will fully terminate all Bitcoin mining actions, focusing solely on AI information middle ambitions and ship optimistic indicators to potential hyperscalar tenants,” the analyst wrote.
As Rittenhouse writes, Cipher Mining CEO Tyler Web page just lately admitted that Miners are dealing with after they strategy key AI clients.
“Once you’re speaking to counterparties with a market capitalization of $1 trillion, the draw back of Bitcoin Miners is that the key counterparties say, “Wow, it is an important responsibility for us to backstop for such a crucial funding.”
The Galaxy would not have that downside. With this Helios contract in place and the Novogratz firm is totally out of mining, the Galaxy unintended pivot could develop into Crypto’s finest strategic transfer over time if Rittenhouse’s paper is appropriate.
