Mr. Asher Genoot reports

HUT 8 AND BITMAIN EXPAND INNOVATION PARTNERSHIP WITH LAUNCH OF NEXT-GENERATION BITMAIN MINER

Hut 8 Corp. has expanded its partnership with Bitmain Technologies Ltd., the world's largest manufacturer of digital currency mining servers, with the launch of the U3S21EXPH, a next-generation ASIC (application-specific integrated circuit) miner. Hut 8 plans to deploy the model in Q2 2025 through an approximately 15-exahash-per-second hosting agreement leveraging custom data centre infrastructure developed in-house by Hut 8.

As part of its long-term, power-first strategy, Hut 8 continues to scale its compute layer across energy-intensive technologies, including both bitcoin mining and AI (artificial intelligence) compute, with the aim of maximizing returns on its portfolio of power assets and digital infrastructure. The launch and commercialization of the U3S21EXPH are a key milestone in executing this strategy in the company's bitcoin mining segment as it advances scaled opportunities in AI compute.

Revolutionizing ASIC compute -- U3S21EXPH

The U3S21EXPH will be the first ASIC miner mass commercialized by Bitmain to feature direct liquid-to-chip (DLC) cooling within a U form factor. Capable of achieving up to 860 terahashes at an efficiency of 13 joules per terahash, the model represents the culmination of an extensive miner-manufacturer partnership between Hut 8 and Bitmain. Under the partnership, which spans technical and commercial innovation, Hut 8 supported Bitmain in the development of the miner.

Key advancements:

• Technology -- introduces DLC cooling technology used in high performance computing (HPC) data centres to a rack-ready form factor for bitcoin mining;
• Engineering -- evolution from shoebox ASIC form factor incompatible with traditional data centre rack architecture to U form factor compatible with HPC-style architecture that can be deployed at densities of up to approximately 180 kilowatts per rack;
• Procurement -- strong overlap in secondary components with HPC data centres, including racks and cooling systems required for DLC technology, driving the opportunity for greater supply chain synchronization across bitcoin mining and HPC data centres;
• Construction -- opportunity to apply construction expertise and capabilities across bitcoin mining and HPC data centres.

To fully harness the potential of the U3S21EXPH, Hut 8 has developed a custom design for bitcoin mining data centre infrastructure inspired by traditional rack-based architecture. This design will be leveraged to house the initial approximately 15-exahash-per-second deployment at a density of up to approximately 180 kilowatts per rack.

"Our partnership with Bitmain has allowed us to advance our thinking on ASIC compute and create a more scalable model for data centre design as we expand our footprint," said Asher Genoot, chief executive officer of Hut 8. "The U3S21EXPH will be the first miner from Bitmain broadly commercialized with DLC cooling within a U form factor, making it rack ready like traditional data centre hardware. This innovation bridges critical engineering gaps between bitcoin mining and AI data centre infrastructure in both form factor and cooling technology, and we believe this convergence will enable us to unlock significant synergies and flexibility going forward."

"Asher and Mike have been invaluable thought partners to Bitmain since the early days of U.S. Bitcoin Corp., where they demonstrated a unique focus on cost-efficient procurement and operations," said Irene Gao, vice-president of mining of Bitmain. "Hut 8's technical expertise, operating strength and track record of innovation made this partnership a natural evolution of our relationship as we began the journey of developing next-generation ASIC technology. We are excited to deepen our relationship as we continue to define the future of mining."

Commercializing the U3S21EXPH

The U3S21EXPH will be commercialized through a creatively structured hosting agreement between Hut 8 and Bitmain. The agreement features a favourable fixed hosting fee with an option for Hut 8 to purchase all or a portion of the hosted machines in up to three tranches at a fixed price within six months of energization of the relevant tranches.

The structure is designed to drive a superior risk-return profile for the acquisition of new machines for Hut 8's self-mining fleet by reducing upfront capital requirements, offering a lower cost of capital and derisking a potential purchase by allowing the company to assess future market conditions before committing additional capital.

The initial agreement comprises approximately 15 exahashes per second and is expected to increase Hut 8's hash rate under management from 18.5 exahashes per second to approximately 33.5 exahashes per second. If Hut 8 were to execute the purchase option for the entirety of the approximately 15-exahash-per-second hosting deployment, the company's self-mining hash rate is expected to increase from 5.6 exahashes per second to approximately 20.6 exahashes per second.

"Our team worked closely with Bitmain to implement an innovative structure to commercialize the U3S21EXPH before it became available to the broader market," said Mr. Genoot. "For Hut 8, the benefit of the structure is twofold: It protects our downside with a fixed-price hosting revenue stream, and it creates significant option value with a fixed-price purchase option. We believe this model represents a more thoughtful approach to capturing the lucrative economics offered by next-generation machines, reducing upfront capital requirements while we continue to pursue growth initiatives in AI infrastructure."

About Hut 8 Corp.

Hut 8 is an energy infrastructure operator and bitcoin miner with self-mining, hosting, managed services and traditional data centre operations across North America. Headquartered in Miami, Fla., Hut 8 has a portfolio comprising 20 sites: 10 bitcoin mining, hosting and managed services sites in Alberta, New York and Texas; five high performance computing data centres in British Columbia and Ontario; four power generation assets in Ontario; and one newly announced site in the Texas panhandle.

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