HIVE's BUZZ HPC Borrows $129m at 9% for Cohere GPUs

HIVE Digital Technologies has lined up about $129m of debt to pay for the NVIDIA GPUs it will rent to Cohere. The loan carries a fixed 9.0% interest rate over three years, sits inside a single project company and will be repaid from the Cohere contract itself, HIVE said in a news release dated 27 October, which it also posted in full on its X account.

The deal shows how a bitcoin miner is paying for its push into AI cloud computing without selling more shares. HIVE says no common shares are issued under the facility. The rest of the GPU bill is being covered by convertible bonds it sold earlier this year.

A loan tied to one cluster and one customer

The borrower is BUZZ Alpha Cloud Inc., an indirect subsidiary of HIVE that sits under its AI cloud arm, BUZZ High Performance Computing. It has signed a loan and security agreement with an institutional lender, which HIVE does not name. Principal and interest are paid down over the life of the loan, so the debt shrinks each period rather than falling due in one lump at the end.

The money buys an AI GPU cluster built around NVIDIA GB200 NVL72 systems, plus related equipment, for the three-year Cohere contract HIVE announced on 18 June 2026. HIVE puts the price at $165m for 2,303 GB200 GPUs, so the loan covers what it calls “approximately 80%” of the cost. Delivery is expected towards the end of the fourth quarter of 2026.

The lender’s security is the GPUs and other assets of BUZZ Alpha Cloud. BUZZ HPC gives a limited recourse guarantee and pledges its shares in BUZZ Alpha Cloud, but HIVE says BUZZ HPC is not otherwise liable. The loan includes covenants, among them required debt-service coverage ratios, which test whether the contract earns enough to keep up repayments. At the end of the term HIVE will own the GPUs outright with no final balloon payment.

Cohere’s contract is now valued at $225m

Chief executive Aydin Kilic said the Cohere deal is a three-year fixed contract with a total contract value of $225m, which includes GPU compute plus connectivity and storage. The release says the $220m figure HIVE gave earlier covered GPU compute only. “We have signed $600 million of TCV for GPU cloud deals this year, across three GPU off-take contracts,” Kilic said.

HIVE’s own share of the cost is being funded from 0% convertible bonds that raised $245m gross, or about $200m net after capped calls, the company says. HIVE also argues that $165m is “a very attractive price” because NVIDIA hardware prices have risen substantially over the past six months, and that a fixed rate gives it predictable cash flow at a time when many rivals borrow at variable rates. Those are the company’s own views.

HIVE says the cluster will keep compute inside Canada. Executive chairman Frank Holmes framed the deal around sovereignty. “We believe sovereignty in the AI era will depend on where compute lives and who controls it,” he said. Cohere is a Canadian AI company, last covered by TSN when it signed a letter of intent to buy AI security start-up AISLE. BUZZ HPC is also proposing a C$3.5bn AI campus in Oakville, Ontario.

Fixed-rate project debt puts the risk on one contract

The structure is a small-scale version of how much bigger AI builders are paying for chips. Nebius took a $3.5bn bridge loan from Citi to fund its GPU build-out. SpaceX has described its $40bn GPU arrangement as a binding lease, and banks and Blackstone have lined up $63bn for Broadcom chips leased to Anthropic. In each case the hardware is financed against the cash it is expected to earn, rather than from the parent’s balance sheet alone.

HIVE’s version is unusually tight. The debt runs for three years, the same length as the Cohere contract, and repayments are spread across the whole term. That matters because GPUs lose value quickly as new generations arrive, a risk HIVE lists itself. Paying the loan off over the contract means the debt should be gone by the time the chips are old, if Cohere keeps paying. The limited guarantee also means a problem at this one project should not pull in the rest of HIVE’s business.

The weak point is concentration. One customer pays for one cluster that backs one loan. If delivery slips past the end of 2026, or Cohere changes or ends the contract, the coverage ratios could be breached, and HIVE’s own risk factors say the lender could then take the GPUs and the pledged shares. For shareholders, the trade-off is clear: no new shares now, in return for a fixed 9% cost and a project that has to run on schedule.

The next marker is delivery of the 2,303 GPUs, which HIVE expects towards the end of this quarter.