In relation to this topic, please read the Corporate News of 16 July.

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Dear Shareholders,

We have been made aware of critical allegations on social media, which we would like to address.

As a stock-market-listed company, operating in a regulated environment, we are open and transparent, while still protecting our intellectual property and commercially sensitive information. A trusted relationship with satisfied customers is our number one priority, as this ensures the long-term success of Northern Data and creates value for all stakeholders.

In general, we are aware that we operate in a highly competitive environment and that some HPC providers at smaller scale might see the emergence of Northern Data as a threat. Some of them might believe and promote that they are able to offer cheaper and better services. Ultimately, clients decide which company provides the best offering.

On Social Media, we were able to identify a recurring pattern of allegations:

  • It was asserted we are “camouflaging” our operations as some new high tech – “HPC”, combined with AI etc. – while the sole source of revenues was bitcoin mining, which apparently is very volatile; hence Northern Data revenues must be inherently volatile
    1. Indeed, bitcoin mining was one of the first applications of HPC in general.
    2. We are publicly very open – and proud – that the roots of Northern Data lie in bitcoin mining, as Northern Data originated from a merger between Whinstone US and Northern Bitcoin AG. The previous experiences and lessons learned in this challenging environment helped us achieve today’s performance and understand and meet the needs of our clients.
    3. We have disclosed at numerous occasions (website, various news, annual report, etc.) that our largest customers do focus on bitcoin mining, but they do not constitute 100% of our revenues. We see a continuous increase in diversification with respect to the business and tasks our clients inquire.
    4. Even though some of our customers might be exposed to the volatility of the Bitcoin price, we generally are not, as we get paid in $ct / kwh and have a minimum consumption rate negotiated with our customers.
    5. With some customers we have performance-related additional agreements in place, but the base revenues are always fixed. Hence, we are not vulnerable to the volatility of the bitcoin price. Only in some cases is our upside dependent on the bitcoin price and, even in these cases, only to a small extent.
    6. At the moment, our focus is to scale up our operations to reach our targeted capacity at our Texas site, and at the same time we are exploring new sites globally. Hence, we are happy for every new customer that we onboard, whether they are a bitcoin miner or a biotech company. Currently, we see the greatest demand for HPC solutions indeed coming from bitcoin mining operations, but we estimate that the demand will grow more rapidly for other applications in the coming years.
    7. Most important: For Northern Data, it does not matter what kind of operations our clients perform. The factors which do matter for us are: financials of the contract, duration, and rating (financial solidity) of the respective client.
  • We are alleged to have energy costs of $5-6ct / kwh and that this is way too high and unsustainable. At the same time, it is insinuated that some of our customers pay less than $3ct / kwh and that Northern Data has “hidden” losses with an equity investment of certain clients. Additionally, it is questioned why our mining clients commit to 5-year contracts
    1. The assumptions on which these attacks are based are inherently flawed, and as a consequence the conclusions reached are simply wrong.
    2. The details of our contracts with the energy providers on the one side and with our customers on the other side have not been publicly disclosed (because of stock-market disclosure reasons; because of confidentiality agreements with our clients; because of keeping commercially sensitive data from competition).
    3. Our customers pay us not only for the energy they consume, but the premium hosting services we can provide them with. These premium hosting services for example include: installation and maintenance of the hardware, AI-driven management of the operations, etc. Therefore, the price we get paid by our customers is not just for energy alone.
    4. Other HPC providers in the bitcoin mining space have major difficulties in, firstly, setting up profitable facilities and, secondly, scaling them up to a similar level to Northern Data. Our customers choose to partner with us because we offer a stress-free, stable, full-service operation for them, at a scale which is quite unique.
    5. The 5-year (or sometimes longer) contracts show that our clients want to lock in our capacity, premium services and their current terms for a long period of time.
  • It is alleged that the conversion of our convertible bond has diluted shareholders with a low issuance price of the new shares
    1. The convertible bond notes were offered with subscription rights to all Northern Data shareholders. Hence, every shareholder at the time of issuance had the opportunity to equally participate.
    2. The convertible bond notes and their terms have always been publicly announced and fully disclosed since November 2019.
    3. Notes which were not subscribed to by existing Northern Data shareholders have been taken up by customers (same terms and conditions, no preferential treatment). This investment of our customers is a testament to how satisfied they are with our services, such that they want to participate in the success of Northern Data for the long term (signing a long-term lock-up for their shares).

We hope these facts facilitate a broader understanding of our business model and are looking forward to continuing our successful journey with you. If you want to be informed regularly about all news and events, please sign up to receive our newsletter.

Yours sincerely, on behalf of the entire Northern Data Team,

Aroosh Thillainathan


This press release does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities of Northern Data AG and does not constitute a prospectus of Northern Data AG. The information contained in this press release is not intended to form the basis of any financial, legal, tax or other business decision. Investment or other decisions should not be made solely on the basis of this press release. As with all business and investment matters, please consult qualified professional advice. This release and the information contained herein are not for distribution, directly or indirectly, in or into the United States of America, Canada, Australia or Japan.