AI Cloud Firm Northern Data Raided by German Investigators

(Bloomberg) -- German investigators have carried out raids in relation to Northern Data AG, the Frankfurt-listed technology firm backed by stablecoin issuer Tether Holdings Ltd. that has been moving away from crypto mining to focus on artificial-intelligence computing. 

“There were raids in connections with Northern Data yesterday,” a spokesperson for Frankfurt-based prosecutors told Bloomberg News on Friday. The spokesperson declined to comment on the reason for the raids or what investigators were searching for, only saying that prosecutors are expected to release more details on Monday. Northern Data didn’t immediately respond to a request for comment. 

Northern Data shares plunged as much as 12% to €16.48 on news of the raids. They were down 8% at about 2:40 p.m. in Frankfurt. 

Northern Data has its roots in crypto mining, providing the computing capacity necessary to mine for cryptocurrencies such as bitcoin and marketing itself as a greener alternative. But the generative AI boom has sent computing demand for that technology soaring, and the company has transitioned alongside many of its peers to providing resources to those building, training and running AI systems. 

The company recently signed a deal to provide data center capacity for the state-backed Abu Dhabi AI firm G42. 

Northern Data is majority-owned by Tether Holdings SA, which also invested in the conservative YouTube alternative Rumble Inc. Last month, Bloomberg reported that Rumble was weighing an offer to buy Northern Data in an all-stock deal that would value the target at about $1.17 billion. 

On Monday, Northern Data announced a leadership overhaul, promoting Chief Operating Officer John Hoffman to co-chief executive officer alongside Aroosh Thillainathan. The company said it has 22,000 AI chips under management in facilities across Europe, with its flagship European site located in Boden, Sweden. 

--With assistance from Mark Bergen.

(Updates with shares in third paragraph and context throughout)

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