Bitcoin mining infrastructure firm Luxor raises $16 million to expand AI business

Luxor Technology, a bitcoin mining infrastructure firm, has announced a $16 million investment round as it expands into an AI infrastructure business.

CMT Digital led the round, with participation from Canaan, MicroBT, Halo, Steelhead, and unnamed angel investors. The round included primary and secondary capital.

"Primary is preferred equity, and secondary was a mix of preferred and common equity," Luxor COO Ethan Vera told The Block. "Primary was used to drive growth in the company, and secondary was used to bring new strategics into the round. I can't share the exact breakdown."

Luxor began raising the new capital in August and closed that part of the round in October, Vera said. He did not share the valuation or whether any investors received board seats, observer roles or advisory positions.

Luxor's last priced equity round was in 2021. Before this deal, it had raised $6.575 million in primary capital across three rounds, Vera said. The firm's headcount has grown from 11 at the time of the 2021 round to 106 now, mainly using cash generated by the business, Vera added.

The new funding comes about five years later and follows the September launch of Luxor AI, which takes the hardware, software, energy, data, and trading services Luxor developed for bitcoin miners into AI and computing.

"We have been waiting to raise capital until there was a clear use of proceeds, which is now present with our rapid expansion into the AI industry," Vera said.

Expanding beyond bitcoin mining

Luxor's bitcoin business includes a mining pool, software for running mining machines, hardware trading, energy services, and hashrate derivatives. Its AI business similarly covers hardware, cloud computing, energy and financial contracts.

"Compute markets are converging: the same miners, power sites and capital that served digital mining are now powering AI," Nick Hansen, Luxor's co-founder and CEO, said in a statement.

Luxor's hardware desk has traded more than $1 billion in specialized bitcoin mining equipment, known as ASICs. Its energy business services more than 75 megawatts of load across the Electric Reliability Council of Texas, or ERCOT, and Southwest Power Pool, or SPP, power markets, Vera said.

Vera said some of the funding will support Luxor's hardware business, which sources GPUs and AI servers for customers.

Luxor also plans to expand its cloud platform. It provides sandboxes and runners for AI agents, along with AI code review, Vera said. The platform had run 1.8 million workloads this year as of September, according to the company.

"Luxor Cloud is focused on servicing the exponentially growing AI-assisted code generation," Vera said.

Trading and financing AI compute

The funding will also go toward Luxor's compute derivatives trading and market making. Luxor said its over-the-counter desk offers options, forwards and backstops based on compute-rental indexes. The contracts are settled in cash.

"We are offering financial contracts for AI companies to hedge, finance and speculate on AI compute," Vera said.

In August, Luxor also launched an AI Hardware Price Index through its Hashrate Index data platform to track GPU node prices.

Asked how Luxor would compete with AI startups raising much larger rounds, Vera said those companies are potential customers for its hardware, energy and derivatives services.

"Luxor has built a business that services over 3,000 clients today, not off the back of large funding rounds but of a dedicated client focus," he said.

Luxor plans to hire about 12 more people across engineering, product, and sales and marketing before the end of the year, Vera added.

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