Galaxy Digital's AI Infrastructure Expansion: A Strategic Move for Dominance in Compute

Julian WestTuesday, May 27, 2025 11:21 pm ET
3min read

The digital age is fueling an insatiable demand for high-performance computing (HPC) and artificial intelligence (AI) infrastructure, a trend that has positioned Galaxy Digital as a pivotal player in the data center revolution. With its recent underwritten public offering, the company is making a bold bet on its Helios data center campus in West Texas—a move that could cement its role as a leader in the AI infrastructure space. Here's why investors should take note.

text2imgA sprawling aerial view of Galaxy Digital's Helios data center campus in West Texas, with rows of server racks illuminated under the desert sky, symbolizing cutting-edge technology and scalability./text2img

The Capital Allocation Play: Building for the Future

Galaxy's underwritten offering of 29 million Class A common shares, with an option to raise an additional 4.35 million shares, is not merely a liquidity play—it's a strategic allocation to scale its AI/HPC infrastructure. The net proceeds will be directed to its subsidiary, Galaxy Digital Holdings LP (GDH LP), which will invest in expanding Helios' capacity. This focus aligns with a global shift toward AI-driven industries, where companies like CoreWeave (a key partner) are demanding vast compute resources to power generative AI models and advanced simulations.

The Helios expansion is central to this strategy. By securing a 393 MW capacity commitment with CoreWeave—a 260 MW Phase II expansion added to an initial 133 MW Phase I deal—Galaxy is locking in revenue streams that could generate over $700 million annually once fully operational by 2027. Over a 15-year lease term, this single partnership alone could deliver $900 million in average annual revenue, factoring in contractual escalators. Such long-term, high-margin agreements (projected 90% EBITDA margins) are a stark contrast to the volatility of Galaxy's digital asset trading business, which contributed to its Q1 2025 net loss of $295 million.

visualGalaxy Digital's projected annual revenue from Helios data center leases vs. its digital asset trading business over the next 5 years./visual

Why Helios Represents a Tipping Point

The Helios campus is no ordinary data center. Located in a region with abundant renewable energy and low cooling costs, it's designed to meet the hyperscale demands of AI workloads. The CoreWeave partnership, which now spans 393 MW—a capacity rivaling some of the largest cloud providers—signals confidence in Helios' ability to deliver reliable, energy-efficient compute power. For Galaxy, this is a strategic moat: once these leases are operational, recurring revenue will stabilize its balance sheet and reduce reliance on volatile digital asset markets.

The financials further underscore the opportunity. As of May 12, 2025, Galaxy's equity capital stood at an estimated $2.2 billion, with $1.1 billion in cash and stablecoins, providing a cushion to navigate near-term risks. While the Q1 loss was driven by non-cash impairments (e.g., halting mining operations at Helios), the Data Centers segment is now positioned to deliver $700 million+ in annual revenue starting in 2026—a stark turnaround from its current status as a non-revenue-generating asset.

The Risks and the Reward

No investment is without risk. Delays in Helios' construction timeline, regulatory hurdles (notably SEC approval for the offering), or a sudden slowdown in AI adoption could undermine near-term progress. However, the strategic upside far outweighs these concerns. The AI infrastructure market is projected to grow at a CAGR of 22% through 2030, and Galaxy's early-mover advantage in West Texas—where land and energy are cheaper than in coastal tech hubs—positions it to capture first-mover profits.

A Call to Action: Own the Compute Infrastructure of Tomorrow

Galaxy Digital's underwritten offering is a once-in-a-decade opportunity to invest in a company poised to capitalize on the AI revolution. With its Helios expansion, it's building the backbone of a new economy—one where compute power is as critical as electricity.

visualComparison of Galaxy Digital's projected 5-year revenue growth vs. competitors in AI infrastructure (e.g., Equinix, Digital Realty)./visual

For investors seeking exposure to the next wave of tech innovation, Galaxy's shares—now listed on NASDAQ—offer a direct stake in a high-margin, recurring revenue model with minimal competition in its Texas-based, hyperscale niche. The risks are clear, but the stakes are higher: missing this bet could mean missing out on a foundational player in the AI era.

Act now. The future of compute is being built in West Texas—and Galaxy Digital is at the controls.