Tether, the company behind the largest stablecoin in the cryptocurrency market, is expanding its horizons with plans to invest a substantial portion of its revenue into cutting-edge technologies. According to CEO Paolo Ardoino, Tether will channel at least $1 billion into areas such as artificial intelligence (AI), biotech, and emerging markets through its venture capital arm over the next 12 months.
In an interview with Bloomberg on June 11, Ardoino detailed Tether’s ambitious investment strategy. The firm’s venture capital team, currently consisting of 15 members, meticulously evaluates hundreds of pitches each month to identify promising opportunities. Over the past two years, Tether has already invested around $2 billion in technology sectors including AI and alternative financial infrastructure.
Strategic Investments in AI and Biotech
One of Tether’s significant investments in AI includes a $610 million debt financing facility extended to the data center operator Northern Data Group in 2023. This strategic move underscores Tether’s commitment to supporting technological advancements that align with its broader goals of reducing reliance on traditional finance and large tech companies. Ardoino highlighted:
“We can offer AI computing to all the companies we have invested in. It’s all about investing in technology that helps with disintermediation with traditional finance. Less reliance on the Big Tech companies like Google, Amazon, and Microsoft.”
Tether’s expansion into diverse technological fields comes on the back of record financial performance. In the first quarter of 2024, Tether reported a net profit of $4.52 billion. This figure includes $3.52 billion from financial gains on Bitcoin and gold, with an additional $1 billion derived from operating profits. Ardoino noted that Tether’s financial success has attracted a surge of investment opportunities:
“You can imagine that the news that Tether is making good money went around the world. We get tens or hundreds of deals per month that are on the table, and we only end up doing a very small percentage of that.”
A Unique Investment Approach
Unlike traditional venture capital firms, Tether adopts a unique approach to its investments. Ardoino explained that Tether’s investment policy is driven by a keen interest in projects that resonate with its core values and strategic vision. He emphasized that Tether does not impose stringent profitability targets on the companies it invests in:
“Our investment policy is investing only in projects we find extremely interesting. We are not a classic VC. We do invest in things that we care about, and we have our own strategy.”
Tether’s operations extend far beyond its flagship stablecoin, USDT. The company has recently restructured into various divisions, including Tether Data, Tether Finance, Tether Power, Tether Edu, and Tether Evo, as announced in April 2024. This restructuring is part of Tether’s broader strategy to diversify its business operations and reinforce its position in the digital asset industry.
Increasing Involvement in Bitcoin Mining
In addition to its ventures in AI and other emerging technologies, Tether has also been investing in Bitcoin mining. In May, Tether committed $150 million to Bitdeer, a crypto mining firm founded by Jihan Wu. This investment reflects Tether’s belief in the long-term potential of Bitcoin and its integral role in the cryptocurrency ecosystem.
As Tether continues to explore and invest in transformative technologies, it aims to drive innovation while staying true to its roots in the crypto and blockchain sectors. The company’s approach to investment is characterized by a focus on meaningful, strategic projects that align with its mission to decentralize finance and reduce dependence on traditional financial systems.
With Tether’s substantial financial backing and a proactive investment strategy, the firm is well-positioned to make significant contributions to the advancement of technologies that will shape the future of finance and beyond.
Tether’s plan to invest up to $1 billion in emerging technologies over the next year underscores its commitment to innovation and its strategic vision for the future. By leveraging its financial success and adopting a distinctive investment approach, Tether is poised to influence key sectors such as AI, biotech, and financial technology. As it navigates this path, Tether continues to solidify its role as a major player in the evolving digital economy.
Featured image credit: AFP via Getty Images