Galaxy Digital turns Bitcoin mining rescue into $4.5 billion AI deal
Galaxy Digital signed a $4.5 billion, 15-year hosting deal with CoreWeave for its Helios facility, expected to generate over $1 billion in annual revenue with 90% EBITDA margins. Despite this, the stock lags due to an identity crisis where investors view it as a crypto bank rather than an AI infrastructure play. A potential spin-off of the data-center division is seen as a way to unlock value by aligning valuations with industry peers.
*this image is generated using AI for illustrative purposes only.
Galaxy Digital converted a $65 million rescue of a distressed Bitcoin mining facility into a $4.5 billion artificial intelligence infrastructure opportunity by signing a 15-year hosting agreement with CoreWeave. The deal centers on the Helios mining facility, which Galaxy acquired from Argo Blockchain, and has since been repurposed to support high-performance computing (HPC) and AI workloads. CoreWeave has exercised expansion options to utilize the site's entire currently approved 800 MW power capacity, signaling strong demand for the infrastructure.
Financial Projections and Operational Metrics
The transformation of the Helios site is expected to yield significant financial returns for Galaxy Digital. The company projects that the facility will generate more than $1 billion in annual revenue on average over the contract term. Operational efficiency is highlighted by lease-level EBITDA margins approaching 90%, underscoring the profitability of the hosting arrangement compared to traditional crypto mining operations.
| Metric | Value |
|---|---|
| Agreement Value | $4.5 billion |
| Contract Duration | 15 years |
| Power Capacity | 800 MW |
| Expected Annual Revenue | >$1 billion |
| Lease-level EBITDA Margins | ~90% |
Market Perception and Identity Challenges
Despite the operational success and robust financial metrics of the Helios facility, Galaxy Digital's stock performance has lagged behind other AI infrastructure and HPC-focused companies. Market analysis suggests that investors continue to categorize Galaxy primarily as a crypto-focused investment bank engaged in trading, asset management, mining, and capital markets activities. This perception creates a disconnect between the company's evolving business model and the valuation multiples typically applied to pure-play AI infrastructure firms.
The company finds itself caught between two distinct peer groups. Crypto investors benchmark Galaxy against entities like Coinbase Global and MARA Holdings, while its data-center operations increasingly resemble those of established infrastructure operators such as Digital Realty Trust and Equinix. This identity crisis complicates the market's ability to accurately price the value of the company's AI assets.
Strategic Options for Value Unlocking
With the first phase of the CoreWeave partnership now operational and lease revenue beginning to flow, investors are exploring strategic alternatives to bridge the valuation gap. A potential spin-off of Galaxy's data-center division is emerging as a key catalyst that could unlock significant shareholder value. Separating the AI infrastructure business would allow the market to apply data-center valuation multiples to the asset, rather than the lower multiples associated with the crypto sector. This move could help close the valuation disparity and provide a clearer reflection of the Helios facility's contribution to the company's overall worth.
What specific timeline and regulatory hurdles would Galaxy Digital face if it pursued a spin-off of its data-center division?
How will the 15-year contract with CoreWeave impact Galaxy Digital's capital expenditure requirements over the next decade?
Could the success of the Helios repurposing trigger a broader trend of converting distressed crypto mining facilities into AI infrastructure?
17
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
