Hut 8 announced Monday it has entered into a definitive agreement with a fund operated by Coatue Management to invest $150 million into the company through a convertible note.

Miami-based Hut 8, known mostly as a bitcoin miner, aims to leverage its ability to develop and operate complex energy infrastructure to address unmet demand and emerge as a leader in the artificial intelligence infrastructure market.

“We are committed to supporting innovators advancing AI and believe that compute capacity is crucial to unlocking significant growth across the ecosystem,” said Philippe Laffont, Founder and Portfolio Manager of Coatue. “We believe that Hut 8 is well-positioned to accelerate new compute capacity and can capitalize on the opportunity it will bring.”

Bitwise Senior Crypto Research Analyst Juan Leon sees the intersection between AI and crypto as forming a mega-trend that could add as much as $20 trillion to the global economy, The Block previously reported.

“We are thrilled to be partnering with Coatue, given the firm’s deep expertise and long track record of investments in the AI ecosystem,” said Hut 8 CEO Asher Genoot. “We believe this partnership will allow us to unlock significant opportunities and connectivity to the broader space as we enter this next phase of growth.”

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Coatue will have the option to convert the note into shares of common stock. The initial conversion price of the note is $16.395 per share of common stock, subject to the conversion price, which is an approximately 45% premium to the 10-day volume-weighted average price through June 20, 2024, the day before the signing of the note purchase agreement.

Hut 8 has a portfolio comprising 19 sites. As of March 31, Hut 8 ranked second among listed miners in terms of bitcoin holdings, with 9,102 bitcoins held in reserve, worth roughly $557 million as of publication time.

Shareholders seem happy with the Coate investment, as Hut 8's stock was trading up 5% at publication. The rest of the mining sector was selling off in conjunction with the drop in the price of bitcoin.