Hive Blockchain (HIVE), a bitcoin mining company, said on a teleconference with analysts on Friday that it wants to let customers train big language AI models in its data centers because it offers more privacy than competitors like OpenAI’s ChatGPT.
Companies are now aware that they don’t want to upload private client information to an organization like OpenAI that uses a publicly accessible broad language model. What we want to provide at Hive through Hive Cloud is privacy, allowing businesses to run AI [artificial intelligence] compute workloads on our bank of GPUs [graphics processing units] while also having a service agreement in place, ownership of their data, and privacy, according to Aydin Kilic, CEO and President of the mining company.
Recently, Hive’s Nasdaq shares increased by over 2%. As mining economics have interfered with their profitability, with some facing bankruptcy, miners have been turning more and more to AI, while the AI sector is experiencing a boom in investment interest. It is still unclear if miners can compete with major IT companies like Google and Amazon Web Services, who profit from economies of scale and have years of expertise managing top-notch data centers that serve customers.
Large language models employ probabilistic computations to comprehend and produce human language. They are frequently trained on graphics processing units, a class of semiconductor-based electronic circuit that was first employed for picture processing but has since been discovered to be effective at handling AI workloads.
From the time it mined ethereum, Hive has a fleet of 38,000 GPUs. Some of them have been used to mine alternative cryptocurrencies, while others are used in its cloud service or are offered for rental.
On the results call, the company stated that its GPUs should generate a run-rate of $1 million yearly. Frank Holmes, the company’s chairman, stated in a press release outlining the annual and quarterly profitability that “500 GPU cards generated $230,000 revenue this quarter.” The fiscal year for Hive ended on March31, 2023.
The gross operating margin for Hive’s fiscal year that concluded on March 31, 2023, was $50.4 million, or 47% of revenue, with $106.3 million in revenue. Its historical revenue for FY2022 was $211.2 million, with a gross operating margin of 78% of revenue. This figure is around half of that amount.
Overall, the company recorded a net loss of $236.4 million for FY2023, which it highlighted includes a number of non-cash charges, including $81.7 million in depreciation, $70.4 million in equipment impairment, and $27.3 million in impairment of deposits. In comparison, the company recorded fiscal year 2022 net income of $79.6 million.