
A recent report has surfaced claiming that a European AI cloud company, Northern Data, has secured a significant tax incentive related to NVIDIA’s AI chips, only to divert these assets towards cryptocurrency mining operations.
Northern Data Secures Tax Break for NVIDIA Chips, Allegedly Misused for Crypto Mining
The global demand for AI chips has led to various governments offering incentives, including substantial tax breaks, to encourage companies to enhance their computational capabilities. In this context, Northern Data, a European AI firm, is under investigation by Swedish authorities for allegedly receiving a tax break estimated at €100 million. This comes in light of their purchase of NVIDIA’s H100 AI chips, valued at around €400 million. The crux of the investigation revolves around the firm’s purported use of these AI chips for cryptocurrency mining rather than legitimate AI workloads.
According to a report from Bloomberg, law enforcement has conducted raids in both Frankfurt and Boden, Sweden, leading to significant revelations concerning a VAT fraud scheme linked to Northern Data. Originally branded as an ‘environmentally friendly’ Bitcoin mining operation, the company has not only focused on mining but also amassed a considerable collection of GPU resources. However, its recent acquisition of NVIDIA’s H100 GPUs, backed by a notable tax break, has raised red flags among European regulatory bodies.

As the crypto-mining boom has diminished compared to recent years, companies like Northern Data are seeking innovative approaches to sustain their business models. This has prompted them to pivot towards AI technologies, aligning with broader trends in the industry. Interestingly, Northern Data has been utilizing AI accelerators for GPU mining—a less conventional choice given that AI chips are not inherently designed for cryptocurrency algorithms. This raises the question of whether the primary goal was to leverage the tax breaks associated with such acquisitions, which constitute a significant percentage of the overall investment in the chips.
The evolution of AI has demonstrated that companies attempting to adopt AI strategies merely for promotional purposes often encounter serious repercussions. Northern Data appears to exemplify this phenomenon, potentially blurring the lines between legitimate business practices and opportunistic exploitation of governmental incentives.
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