Intelion's $135M AI Investment: Russian Crypto Miners Expand Horizons

Russian crypto mining firms are investing heavily in new ventures, with Bitcoin miner Intelion announcing a $135 million investment in AI technology.

Intelion, a leading industrial mining operator in Russia, plans to allocate these funds towards "server equipment for AI computing," according to Russian media outlet RBC. This investment will support a new data center project in the Samara Oblast.

To execute this AI initiative, Intelion will create a subsidiary called Intelion Cloud, focusing on developing companies in the AI sector and offering clients high-performance computing power.

As the global crypto market has surged, Russian crypto mining companies have expanded rapidly, securing deals with energy providers in cooler regions with low electricity costs. This growth has enabled them to branch into AI-related industries, providing new data centers to Moscow in hopes of favorable regulatory treatment.

Moscow aims to launch a nationwide IT development project, and crypto miners believe their data centers will support this goal. Russian experts predict AI development will significantly increase energy consumption, estimating that by 2035, AI-related electricity use could reach 4.5 GW.

Intelion Cloud's inaugural CEO, Maxim Vyaznikov, emphasized that industrial crypto mining creates and maintains large-scale infrastructure designed for future demands. He added that the high current demand for computing power helps offset investments.

The first phase of Intelion's new Samara data center is expected to be operational by the fourth quarter of 2024, with an additional $48.2 million planned for construction over the next two and a half years. The company already possesses modern servers, including advanced Nvidia A100 series graphics accelerators, and intends to offer flexible pricing for AI firms needing server rentals.

The growing demand for continuous AI system operation is generating extra income for Bitcoin miners. Similar trends are seen in the United States, where Core Scientific announced a $3.5 billion, 12-year agreement with cloud service provider CoreWeave, supplying 200 MW to AI projects and earning an average annual income of $290 million.

As the sector pushes for the legalization of industrial mining, government officials are considering recognizing mining as a form of entrepreneurship. In February, BitRiver, another Russian crypto mining firm, announced the construction of a new 100 MW data center in Buryatia.

Many Russian crypto mining companies are strategically building data centers outside traditional Bitcoin hubs like Irkutsk. Samara, known for its oil refining and petrochemical industries, offers cold winters despite its hot summers, making it an attractive location for these new ventures.