{"id":31082,"date":"2023-07-04T00:01:00","date_gmt":"2023-07-04T04:01:00","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/hive-blockchain-to-allow-ai-training-cites-superior-privacy-over-openai\/"},"modified":"2023-07-04T00:01:02","modified_gmt":"2023-07-04T04:01:02","slug":"hive-blockchain-to-allow-ai-training-cites-superior-privacy-over-openai","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=31082","title":{"rendered":"Hive Blockchain to Allow AI Training, Cites Superior Privacy Over OpenAI"},"content":{"rendered":"
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Hive Blockchain (HIVE), a major Bitcoin mining farm, intends to provide customers with access to its data centers, where they could train large language AI models.\u00a0<\/p>\n

According to the company, its solution offers much better privacy, compared to rivals like OpenAI\u2019s ChatGPT.\u00a0<\/p>\n

During an earnings call, the company shared its intentions last Friday, June 30th.<\/p>\n

According to the firm\u2019s CEO and President, Aydin Kilic,\u00a0<\/p>\n

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“Companies now are mindful that they don’t want to upload sensitive client data to a company like OpenAI that has a public LLM [large language model]. What we aspire to offer at Hive through Hive Cloud is privacy where companies can have a service agreement in place, ownership of their data and privacy, and still run AI [artificial intelligence] compute workloads on our bank of GPUs [graphics processing units].”<\/p>\n<\/blockquote>\n

Following the revelation of the firm\u2019s plan, Hive saw a 2% increase in shares before the market closed on Friday.<\/p>\n

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Crypto miners are mixing with the AI sector<\/h2>\n

Miners have shown great interest in AI as mining economics started interfering with profitability.\u00a0<\/p>\n

Some farms have been led to bankruptcy as a result. Meanwhile, the AI sector is booming, attracting interest from investors from the entire world.<\/p>\n

It has yet to be determined whether miners would be able to compete with tech giants like Amazon Web Services and Google.\u00a0<\/p>\n

Both companies have been able to benefit from economies of scale, combined with decades of experience when it comes to high-quality customer-oriented data centers.<\/p>\n

When it comes to AI, large language models can both understand and generate human language.\u00a0<\/p>\n

To achieve this, they use probabilistic calculations.\u00a0<\/p>\n

Developers have trained them using graphics processing units (GPUs), which are electronic circuits made up of semiconductors.<\/p>\n

Initially, GPUs served for faster image processing. However, it wasn\u2019t long before they were discovered to be good for running AI loads.\u00a0<\/p>\n

Hive itself created a massive fleet of 38,000 GPUs. This was created for the purpose of mining Ethereum, back when that was still possible.\u00a0<\/p>\n

Some of the company\u2019s GPUs have since been commissioned for mining certain altcoins.<\/p>\n

However, many remain available for rent-as-a-service, and so far, they have been used to support the firm’s cloud offering.<\/p>\n

Can the company benefit from renting GPUs to AI firms?<\/h2>\n

Assuming that GPUs will be offered for AI training, the company expects a run rate of $1 million per year.\u00a0<\/p>\n

Frank Holmes, the company\u2019s Chairman, noted that 500 GPUs are already generating $230,000 in revenue per quarter.<\/p>\n

Hive concluded its fiscal year on March 31st this year, reporting $106.3 million in revenue. The gross operating margin was $50.4 million, or around 47% of the total revenue.\u00a0<\/p>\n

FY2023\u2019s earnings were about half of FY2022’s earnings, which ended up being $211.1 million. At the time, the gross operating margin was 78% of revenue.<\/p>\n

The company\u2019s FY2023 report also underlines a net loss of $236.4 million, which included several non-cash charges.\u00a0<\/p>\n

The company recorded $81.7 million in depreciation, $70.4 million in impairment to equipment, and $27.8 million in impairment to deposits.<\/p>\n

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