Rumble Inc. Enters Cloud Services Market with Tether Investment

Rumble, a video sharing platform, has shifted focus to the cloud services business after years of pursuing free-speech. The company has received a significant investment from Tether, enabling it to explore new opportunities in the cloud space. The move aims to capitalize on the growing demand for cloud services, as businesses look to migrate their operations online.

Rumble Inc. (RUM), a video sharing platform, has shifted its focus to the cloud services business after years of pursuing free-speech. The company has received a significant investment from Tether, enabling it to explore new opportunities in the cloud space. The move aims to capitalize on the growing demand for cloud services, as businesses look to migrate their operations online.

Rumble has announced an intent to acquire the shares of Northern Data AG (NDTAF) to expand into the AI cloud services business. Northern Data is a leading provider of AI and HPC solutions with ownership of GPUs, including approximately 20,480 H100s and 2,048 H200s, and five data center sites with energized capacity potential of nearly 850 MW. The company reported H1 '25 revenues of EUR 94 million, with the important Cloud and Data Center revenues at EUR 41 million in just Q1 '25 alone [1].

Rumble expects the acquisition to provide access to nearly 1 GW of power, which will be crucial for its entry into AI cloud services. The company has a liquidity (cash/bitcoin) position of $306 million and the support of Tether to complete this transaction. Tether is the majority shareholder of Northern Data and remains a powerhouse in the crypto space with the largest stablecoin driving a cash flow machine [1].

The acquisition is proposed at a price of $1.07 billion based on Northern Data shareholders receiving 2.319 shares for each share owned, amounting to 149.3 million shares of Rumble. Prior reports suggest Northern Data was pursuing a $10+ billion IPO last year, so one definitely has to question the Rumble offer. Though, if Tether supports the deal, the video-sharing platform appears to have reached an acceptable price [1].

Microsoft Corporation (NASDAQ: MSFT) reported robust Q4 FY25 results, with the cloud segment driving significant growth. The company's Azure segment experienced a 34% year-over-year (yoy) increase, reaching $75 billion in fiscal 2025 [2]. Despite supply constraints and capacity tightness until year-end, Microsoft maintains a strong buy rating due to the strong demand for computing services [2].

Rumble's pivot to AI Cloud Services could change its investment story, especially if the acquisition of Northern Data is successful. The company would be on pace for $300 million in annual revenue based on $100 million for legacy Rumble and an annualized $200 million for the Northern Data business with EUR 40 million in Q1 revenues and Q2 numbers limited based on an infrastructure upgrade during the quarter [1].

The key investor takeaway is that Rumble isn't appealing based on the video-sharing platform and a market value exceeding $2 billion. A pivot to AI Cloud Services with an attractive price for Northern Data due to the connection with Tether would change the investment story [1].

References:
[1] https://seekingalpha.com/article/4819586-rumble-watch-for-ai-cloud-shift
[2] https://www.ainvest.com/news/microsoft-q4-fy25-results-show-strong-demand-cloud-services-exceeding-supply-2509/