Rumble Eyes $11.7B Acquisition of Northern Data for AI Cloud Expansion

Rumble, a prominent video platform and cloud service provider, is considering the acquisition of Northern Data, a German data center company, in a deal valued at approximately $11.7 billion. The proposed transaction involves an all-stock deal, where each share of Northern Data would be exchanged for 2.319 newly issued shares of Rumble. This valuation translates to approximately $18.27 per share for Northern Data, which is a significant discount compared to its recent trading price of $26.81 per share.

If completed, the acquisition would create a company valued at approximately $45 billion, based on the latest market values of both companies. However, this valuation is significantly lower than the $160 billion valuation that Northern Data sought for its AI cloud and data center businesses during its previous discussions for an IPO in the United States. Northern Data, initially a cryptocurrency mining company, has since shifted its focus to providing services to enterprises developing AI tools, capitalizing on the high demand for computational power in that sector.

Rumble, which went public in 2022 and recently entered the cloud market, aims to compete in an industry dominated by well-funded Silicon Valley giants. The company launched cloud services for other enterprises last year. The proposed acquisition is supported by Tether, a privately held digital asset company that is the majority shareholder in both Rumble and Northern Data. Tether invested in Northern Data at the beginning of last year and acquired a stake in Rumble in February of this year.

According to statements from both companies, the transaction is contingent on the completion of Northern Data's sale of its cryptocurrency mining business. Northern Data announced on Monday that it has signed a non-binding agreement with Elektron Energy LP to sell its bitcoin mining division. This strategic move aligns with Northern Data's transition away from cryptocurrency mining and towards AI and cloud services, which are expected to drive future growth.

The acquisition of Northern Data would not only enhance Rumble's technological capabilities but also expand its geographical footprint. Northern Data's data centers are strategically located, providing Rumble with access to key markets and enhancing its ability to serve a global customer base. This geographical diversification is crucial for Rumble as it seeks to grow its market share and establish itself as a leading provider of cloud services.

The proposed acquisition is subject to regulatory approvals and other customary closing conditions. Both companies have expressed optimism about the potential benefits of the deal, highlighting the synergies between their respective businesses. The acquisition, if successful, would mark a significant milestone for Rumble, underscoring its commitment to innovation and growth in the tech industry. This strategic move positions Rumble as a major player in the global data center market, leveraging Northern Data's extensive infrastructure and technological prowess. This acquisition could also provide Rumble with a competitive edge in the rapidly evolving AI and cloud computing landscape.