Tether, the stablecoin company, is engaging in a substantial deal worth $420 million, involving artificial intelligence chips and an overseas Bitcoin crypto mining firm.

This move, while not officially confirmed by Tether, has been reported by Forbes based on information from Northern Data and its executives.

According to the Forbes report, Tether has allocated $420 million towards the purchase of 100,000 Nvidia H100 GPUs. These GPUs represent around 2% of Nvidia’s total shipments for the year, which amounts to 550,000 GPUs.

Tether’s acquisition of these chips is on behalf of Northern Data, a German cryptocurrency mining company. Northern Data plans to offer cloud access to these specialized chips to AI startups. In return for this purchase, Tether will acquire a 20% stake in Northern Data.

However, Tether did not directly make this acquisition; instead, it executed the deal and GPU purchase through an Irish shell company owned by Northern Data called Damoon. Northern Data will hold a 70% stake in Damoon, as per earlier announcements from July.

It’s possible that Northern Data may acquire the remaining shares of Damoon, although the exact cost of a full acquisition is unknown.

Aroosh Thillainathan, CEO of Northern Data, explained that they were unable to purchase the chips directly from Nvidia due to the rapid depletion of the chip supply. Consequently, Tether stepped in to procure the required chips.

Forbes also pointed out various controversies surrounding Northern Data, including past hardware purchases through shell companies and issues with financial reporting.

German regulators previously filed a criminal complaint regarding inaccurate revenue reports, although this case has since been closed without further action.