Ethan Vera thought Luxor Technology’s future was helping Bitcoin miners buy and sell mining hardware.
Instead, the chief operating officer is now building a new business around artificial-intelligence computing infrastructure as soaring demand for graphics processing units, or GPUs, creates opportunities to finance hardware, broker deals and eventually trade computing power itself.
Seattle-based Luxor has assembled a team of more than 20 people to help companies source GPUs, raise debt and equity financing for AI data centers and match buyers and sellers of computing power.
Over the past six months since launching the venture, Luxor has arranged $213 million of AI hardware deals and signed $25 million of contracted computing-power agreements. The company plans to open an office in San Francisco in the coming months, Vera said.
“Everyone was doing Bitcoin compute prior — everyone’s now doing AI compute,” Vera said. “Across exchanges, indexes, trading desks and physical delivery locations, there are so many pieces to it. There will be so many people and companies participating in this new ecosystem of compute as a commodity.”
Luxor is among a growing number of crypto firms seeking opportunities as markets for AI computing power begin to take shape. The shift extends well beyond publicly traded Bitcoin miners, many of which have turned to AI infrastructure as tighter mining economics and Bitcoin’s periodic reward halving have made the business less lucrative.
Hardware brokers, financiers, exchanges and trading firms built around crypto are increasingly expanding into the sector. Many are adapting businesses originally built around mining equipment and digital assets to a new market for trading hardware or compute power itself.
Shares of IREN Ltd., TeraWulf Inc., Cipher Mining Inc. and Hut 8 Corp. have surged after announcing multibillion-dollar agreements with technology companies including Meta Platforms Inc. and Alphabet Inc.’s Google, helping them raise billions of dollars through equity and debt offerings to expand their AI businesses.
For some firms, the opportunity extends beyond supplying AI infrastructure to building the markets around it.
Don Wilson, whose trading firm DRW built one of crypto’s largest liquidity providers through Cumberland, founded Compute Exchange and pricing company Silicon Data, which operate a spot marketplace and benchmark indexes for AI computing power, respectively.
Compute Exchange has seen billions of dollars of notional computing power traded on its platform since launching last year, according to Chief Executive Officer Carmen Li. The marketplace connects major cloud-computing suppliers with AI startups that often need millions of dollars of computing capacity. Because GPU prices vary widely depending on factors like location and hardware configuration, the exchange uses a pricing model to normalize those differences.
When we spoke to DRW’s Don Wilson last year, he talked about building out a GPU market that might be bigger than oil. Now, a year later, he is working with Carmen Li to do just that. Li is the CEO of two companies — Silicon Data and Compute Exchange (where she works alongside Wilson). The former company is building the index for GPU pricing while the latter is a spot marketplace for GPU procurement. This episode — recorded during a live show at City Winery in New York — gets into how Li is building a whole new market for GPUs at her two companies. Source: Bloomberg
Ornn, founded by former traders from Susquehanna International Group and Optiver, has created another suite of compute indexes. Crypto trading venues including Hyperliquid and prediction markets such as Polymarket use the benchmarks to let customers trade or wager on future computing-power prices. FalconX, one of the largest prime brokers for digital assets, also executed its first over-the-counter swap linked to the forward price of compute in May.
“We have this huge theory that the way the US progresses in this artificial intelligence boom is by financial markets and creating different markets around compute,” said Kush Bavaria, co-founder and chief executive officer of Ornn. “It is the same thing that has happened to every other commodity in the world.”
Both Silicon Data and Ornn have announced plans to work with CME Group Inc. and Intercontinental Exchange Inc., respectively, to launch regulated futures contracts tied to their benchmarks.
As computing power becomes an increasingly valuable economic resource, firms that built brokerages, financing businesses and trading infrastructure around digital assets see an opportunity to apply many of those same capabilities to buying, selling and eventually hedging AI compute.
Wilson has said AI compute could eventually become one of the world’s largest commodity markets. Whether that vision becomes reality will depend on whether commercial users embrace the market alongside traders and investors.
For Rory Murray, vice president of digital asset management at CleanSpark Inc., a Bitcoin miner that has expanded into AI infrastructure, the market still has significant hurdles to clear.
“You are definitely going to need a lot of thought about standardization of contracts, liquidity overall in the market and then credit underwriting where you want to know if both parties can meet their obligations,” Murray said.
