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Bitcoin mining company Hive Blockchain (HIVE) plans to offer its customers the opportunity to train large language AI models within its data centers, highlighting enhanced privacy features in contrast to competitors like OpenAI's ChatGPT. This announcement was made by the firm during an earnings call with analysts on Friday, emphasizing their commitment to providing improved services.
"Companies now are mindful that they don't want to upload sensitive client data to a company like OpenAI that has a public LLM [large language model]. What we aspire to offer at Hive through Hive Cloud is privacy where companies can have a service agreement in place, ownership of their data and privacy and still run AI [artificial intelligence] compute workloads on our bank of GPUs [graphics processing units]," said Aydin Kilic, CEO and President of the mining firm.
Hive's shares on the Nasdaq experienced a nearly 2% increase on Friday, demonstrating a notable uptick in their value.
As mining economics continue to affect their profitability, miners have been progressively turning to AI as a solution. This shift has resulted in some miners facing bankruptcies, while simultaneously witnessing a surge in investor interest within the AI sector. Nevertheless, it remains uncertain whether miners can effectively compete against tech giants like Google and Amazon Web Services, who enjoy the advantages of economies of scale and decades of experience in operating top-notch customer-centric data centers.
Large language models comprehend and produce human language by employing probabilistic computations. Typically, they undergo training on graphics processing units (GPUs), which are electronic circuits composed of semiconductors initially designed for image processing but have proven to be highly effective in handling AI workloads.
Hive possesses a substantial fleet of 38,000 GPUs that were originally used for ethereum mining. Presently, the company has allocated a portion of these GPUs for mining altcoins, while others are made available for rental services or utilized in their cloud offering.
During the earnings call, the firm projected an annual run-rate of $1 million for its GPUs. The Chairman of the company, Frank Holmes, revealed in a press release on the annual and quarterly earnings that "500 GPU cards generated $230,000 revenue this quarter," It is worth noting that Hive's fiscal year concluded on March 31, 2023.
A screenshot from Hive's presentation to investors on June 30, 2023,
where it discussed its plans to offer large language model training on its GPU fleet
For the fiscal year that concluded on March 31, 2023, Hive recorded revenues of $106.3 million, accompanied by a gross operating margin of $50.4 million, equivalent to 47% of the total revenue. This figure represents a significant decline compared to the previous fiscal year, FY2022, where the company achieved historic revenues of $211.2 million, with a gross operating margin of 78% of revenue.
In FY2023, the firm disclosed a net loss of $236.4 million, which encompassed various non-cash expenses. These included $81.7 million in depreciation charges, a $70.4 million impairment to equipment, and a $27.3 million impairment to deposits. This stands in stark contrast to the previous fiscal year, 2022, when the firm reported a net income of $79.6 million.
