HIVE Secures Credit Facility for AI Infrastructure
HIVE Digital Technologies has secured a roughly $129 million fixed-rate credit facility through its indirect subsidiary BUZZ Alpha Cloud to finance NVIDIA graphics processing units for a contract with Cohere. The financing agreement avoids issuing new common shares while committing the company to a three-year repayment schedule with a 9.0% fixed annual interest rate.
The deal links the expansion of high-performance computing directly to a pre-arranged enterprise customer agreement. The transaction covers hardware acquisitions intended to scale computing clusters within Canada while maintaining corporate capital discipline.
Financing Structure and Equity Contributions
The total cost of the NVIDIA GB200 GPU cluster reaches $165 million, with the new credit facility covering approximately 80% of the purchase price. HIVE plans to cover the remaining equity portion using proceeds from separate, non-interest-bearing convertible bonds that previously generated $245 million in gross proceeds, or roughly $200 million net after capped calls.
The three-year credit facility is secured directly by the GPUs and related infrastructure assets of BUZZ Alpha Cloud. Additionally, BUZZ HPC provides a limited recourse guarantee alongside a pledge of its equity in the borrowing subsidiary, though it assumes no further financial liability beyond those terms. The facility includes customary covenants, including required debt-service coverage ratios, and BUZZ Alpha Cloud intends to repay it from contract revenue.
Contract Economics and Revenue Projections
The underlying agreement with Cohere spans three years and carries a total contract value of $225 million, translating to an expected average annual revenue of $75 million. This contract covers computational power alongside integrated connectivity and storage services. CEO Aydin Kilic noted that the company has signed $600 million of total contract value for GPU cloud deals this year across three GPU off-take contracts.
Media reports estimate the annual debt service obligations will run between $49 million and $51 million, though operating expenses and the identity of the institutional lender remain undisclosed. Consequently, gross contract revenues do not automatically equate to net profitability or free cash flow, as ongoing operational costs must be factored alongside principal and interest repayments.
Deployment Timeline and Canadian Infrastructure
System deliveries for the hardware cluster are scheduled toward the end of the fourth quarter of 2026. Company executives emphasize that the structured debt allows HIVE to own the GPUs outright at the conclusion of the three-year term without any remaining residual payments.
Executive Chairman Frank Holmes noted that the arrangement expands domestic Canadian AI infrastructure while preserving capital structure stability, stating that Canada has the research talent, clean energy, and institutions to help lead that future, and that the company’s vision is to build AI infrastructure that will serve humanity. Market reaction on Wednesday following the announcement saw HIVE shares rise roughly 2.2% in both New York and Toronto trading sessions.
Operational Integration and Market Context
HIVE combines Bitcoin-Mining with the expansion of its artificial intelligence infrastructure under BUZZ HPC. The Cohere project concretizes this expansion, pairing a fixed investment with a multi-year contract that encompasses rechenleistung, connectivity, and storage.
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