AlphaTON Expands Exposure to Decentralized Telegram-Based Cocoon AI with NVIDIA Deal

AlphaTON Capital Corp (Nasdaq: ATON) has signed a $46 million compute infrastructure deal to expand its fleet of chips as it looks to scale the decentralized, Telegram-native Cocoon AI network. The move represents a significant step in the firm's strategy to position itself in the fast-growing AI infrastructure market. The deal will add 576 NVIDIA B300 chips, representing the company's first large-scale confidential compute deployment.

The chips are scheduled for delivery next month in February, with full deployment expected in March. This expansion builds on AlphaTON's existing $20 million in assets on its balance sheet. The deal is not a simple cash transaction. AlphaTON has already contributed $4 million in cash to close the deal and has financed the rest through $32.7 million of closed non-recourse debt financing, and an additional $9.3 million in equity across small installments paid by full deployment in March.

AlphaTON is pioneering a new category in artificial intelligence by providing privacy-preserving, decentralized AI infrastructure deployed at scale through its integration with Telegram's ecosystem and Cocoon AI's confidential compute network. This initiative aligns with the firm's broader vision to leverage the TON blockchain to create new opportunities in the AI space. The Cocoon AI network, developed by Telegram, pays users in Toncoin for renting out their GPUs to process user queries and offers greater privacy than larger players like Google's Gemini or OpenAI's ChatGPT.

Why Did This Happen?

AlphaTON's expansion into decentralized AI infrastructure is driven by the increasing demand for privacy and data sovereignty in AI applications. The firm's strategy is to leverage the TON blockchain and the Telegram ecosystem to create a competitive edge in a market where data privacy is becoming a critical concern. This move is also supported by the company's broader initiatives in the TON mini-app economy and co-branded TON Mastercard.

The deal is part of AlphaTON's larger AI expansion strategy. In December, AlphaTON filed for a $420.69 million shelf registration to fund its AI expansion, including initiatives in the TON mini-app economy and other Toncoin-related projects. This funding will help the company scale its operations and capitalize on the growing AI infrastructure market.

How Did Markets React?

The market has responded positively to AlphaTON's strategic moves in the AI infrastructure space. The company's ability to secure a large-scale deployment of NVIDIA B300 chips, combined with its focus on privacy-preserving AI, has attracted attention from investors and analysts. The projected economics of the deal are strong, with the project expected to deliver a 27% internal rate of return (IRR), 3.82x equity multiple, and 282% ROI.

The deployment of the 576 NVIDIA B300 chips will be hosted at AtNorth's sustainable, 100% hydroelectric-powered data center in Sweden. This choice underscores AlphaTON's commitment to sustainability and cost efficiency, leveraging some of the world's lowest-cost, cleanest energy. Managed services will be provided by CUDO Compute and SNET Energy Ltd, with financing arranged by Vertical Data and LEAP.

What Are Analysts Watching Next?

Analysts are closely monitoring the financial and operational performance of AlphaTON's AI infrastructure expansion. The company's balance sheet has been strategically de-risked by adding physical compute assets, strategic partnerships, and revenue-generating infrastructure. This approach is expected to provide a solid foundation for the AI infrastructure supercycle ahead.

The broader AI infrastructure market is experiencing significant investment and expansion. Other companies, such as Digi Power X and Eleveight AI, are also deploying large-scale GPU clusters to meet the growing demand for AI processing. Digi Power X has acquired $20 million of NVIDIA B300 GPUs for its NeoCloudz AI platform, while Eleveight AI has deployed NVIDIA B300 Blackwell GPUs in its data center in Armenia.

AlphaTON's CIO Enzo Villani emphasized that the company's balance sheet represents not just capital preservation but also offensive positioning for the AI infrastructure supercycle ahead. This strategic positioning is expected to provide long-term value for investors as the AI infrastructure market continues to evolve.

The success of AlphaTON's AI infrastructure expansion will depend on its ability to execute its deployment plan efficiently and generate consistent returns. The company's strategic partnerships and financial structure are designed to minimize risk while maximizing growth potential. As the AI infrastructure market matures, AlphaTON's focus on privacy-preserving AI and decentralized computing could provide a unique value proposition.