Rumble to Acquire Northern Data in All-Stock Deal, Pivoting to AI Cloud
The proposed acquisition, backed by Tether, aims to build a vertically integrated cloud and AI infrastructure challenger to Big Tech.
Rumble Inc. (RUM), the video-sharing platform known for its free-speech stance, has announced its intention to acquire German data center operator Northern Data AG in an all-stock transaction. The move signals a significant strategic pivot, aiming to transform Rumble into a vertically integrated provider of artificial intelligence and cloud infrastructure.
The proposed deal would see Rumble issue 2.319 new shares for each Northern Data share, creating a combined entity where Northern Data shareholders would own approximately one-third of the company. The acquisition is a bold effort by Rumble to build out its nascent cloud services division, Rumble Cloud, and directly compete with established giants like Amazon Web Services and Google Cloud.
According to an official company announcement, the acquisition is designed to integrate Northern Data’s extensive AI and high-performance computing (HPC) assets. This includes its GPU-as-a-service platform, Taiga, which boasts a significant inventory of highly sought-after Nvidia chips, including over 20,000 H100 GPUs. It also brings Northern Data's five data center sites, with a potential power capacity of nearly 850 megawatts, under Rumble's control.
Shares of Rumble, which has a market capitalization of approximately $2 billion, reacted positively to the news. The company's stock has been under pressure, trading well below its 52-week high of $17.40, and this strategic move could reshape its investment thesis from a media platform to an infrastructure player.
The transaction has the backing of a pivotal player: Tether, the issuer of the world's largest stablecoin. As the majority shareholder in Northern Data, Tether’s support is critical for the deal's success. Upon completion, Tether would become the single largest holder of Rumble’s Class A common stock and has committed to becoming a significant customer, signing a multi-year agreement to purchase GPU services from the combined company.
This support provides both a capital and a customer anchor for Rumble's ambitious infrastructure plans. “This potential acquisition will be a transformative event for Rumble, solidifying our position as a leader in the global AI cloud market,” the company stated, emphasizing the goal of creating a “full-stack AI cloud infrastructure company.”
The strategic rationale is to create an independent and robust infrastructure backbone, reducing reliance on Big Tech providers and offering an alternative in the marketplace. Rumble has positioned itself as a challenger to YouTube, and by extension, Google. This move expands that challenge to the underlying cloud and AI infrastructure that powers the modern internet.
Despite the ambitious vision, the deal is not yet finalized. It remains subject to due diligence, the negotiation of definitive agreements, and necessary regulatory approvals. As initially reported by Bloomberg, the offer valued Northern Data below its recent closing price in Frankfurt, causing the German company's shares to fall following the announcement.
Rumble’s Chairman and CEO, Chris Pavlovski, who maintains majority voting power through a dual-class share structure, has expressed his support for the transaction and is expected to retain control of the combined entity. The company confirmed that no final decision has been made to formally launch the offer, but the intent marks a clear and decisive new chapter for the video platform as it wades into the capital-intensive and highly competitive AI infrastructure arena.