Novogratz Morphs Galaxy Into AI Landlord, One Gigawatt at a Time

Mike Novogratz joked he might be ready for another tattoo.

The billionaire investor’s other ink — celebrating the now-defunct Luna cryptocurrency — became an enduring symbol of the industry’s boom-and-bust era. At this rate, he says, the next one might as well honor Galaxy Digital Inc.’s data-center campus in Texas.

“Maybe I should get a Helios tattoo,” he said in a recent interview, referring to Galaxy’s AI compound. “My guess is the next few sites that we announce will be Texas sites. We have a critical mass down there, we have people down there, we understand the system, so that is easier for us.”

The joke underscores how central AI infrastructure has become to Galaxy’s future. Rather than betting on the next breakthrough technology in artificial intelligence, Novogratz wants to own the very infrastructure the industry relies on, by staking his claim in Texas.

That conviction about grid-connected power — as well as the turf and data centers built on top of it — is transforming Galaxy into an AI infrastructure landlord alongside its existing crypto businesses.

“It’s the simplest part: get power, find a good tenant, lease it, borrow the money and build it and then you’re a landlord,” Novogratz said. “For me, I want to get as much power as I can and I want to get it leased as quickly as I can because after that I am just a rent collector.”

Galaxy is not the only crypto company to pivot to AI during a prolonged rout in Bitcoin — far from it. A growing number of firms have been seeking fresh opportunities in AI as their native businesses have become less lucrative.

Novogratz, a former Goldman Sachs Group Inc. partner and hedge fund manager, built Galaxy into one of crypto’s biggest conglomerates, spanning trading, investing, asset management and banking. He is not giving up on those businesses, but seems to realize that the way to keep them thrumming along for the moment is by pursuing a strategy that Galaxy stumbled into way back in 2022, when it first purchased a 160-acre property in Texas for Bitcoin mining rather than AI.

That $65 million acquisition gave Galaxy a foothold in what’s now a much larger enterprise with a different focus.

At the time, the Helios campus could operate as much as 180 megawatts of mining capacity. It is now approved by the state’s grid operator, the Electric Reliability Council of Texas, or ERCOT, to run 1.63 gigawatts of power — nearly 10 times as much. If Galaxy is approved for additional capacity it has requested, that figure could soar to 3.6 gigawatts, enough to power more than 2 million average US homes.

“It almost becomes a real estate investment trust,” he said. “You have an operating business that turns power and land into projects, and those projects literally become a REIT. That is how we are thinking about it. We have not created a REIT yet, but that’s the psychological mindset of it becoming a cash-flowing asset.”

Chipless Strategy

Galaxy’s strategy differs from some former Bitcoin miners that have completely reconstituted themselves into AI infrastructure providers.

For instance, IREN Ltd. operates data centers but also purchases graphics processing units (GPUs) and rents computing power to customers. Known as the “cloud model,” the idea can generate higher margins right now, but also exposes operators to swings in chip prices, technology cycles and customer demand.

“For the cloud model, ultimately you’ve got more technology risk on the GPUs,” said Chris Brendler, senior research analyst at Rosenblatt Securities. “They depreciate, they have to be replaced and then you’ve got the direct operating costs you have to pay for as well.”

The landlord model Galaxy is pursuing puts those risks onto the renters, Brendler said. The main challenges Galaxy faces are how to deliver more capacity quickly and finding sites beyond Helios. “There is a lot more complexity in the cloud model,” he said.

Novogratz learned a lesson from Galaxy’s time in crypto mining. During that boom, companies borrowed billions to buy specialized computers, only to watch their value collapse when the market turned. AI chips, he believes, could prove similarly vulnerable.

“If you buy chips at the wrong time, chips become less effective faster than expected,” Novogratz said.

Galaxy’s AI halo has led investors and analysts to question whether the company is being valued appropriately, and if it would be better off split apart.

It is difficult to assign specific values to Galaxy’s crypto and AI businesses because they are currently intertwined, said Bill Papanastasiou, senior equity research analyst of digital assets and infrastructure at Chardan. Yet investors are realizing that Galaxy is not like other publicly traded crypto firms.

Galaxy shares are up about 12% so far in 2026, partly due to optimism around its AI ambitions and a deal it signed last year with CoreWeave Inc.That has happened even as Bitcoin has continued its steep march downward since hitting a high in October, and as crypto exchange Coinbase Global Inc. is down about 30% over the same period, while its peer, Gemini Space Station Inc., has dropped 57%.

“The crypto business could weigh on their ability to re-rate to a higher multiple,” Papanastasiou said of Galaxy. “Spot price, volatility and volume — the lack of those three drivers in crypto could impact investor perception on the crypto side of the business.”

Probable Split

Others more weighted in the crypto world have done much worse: American Bitcoin Corp., a miner associated with the family of President Donald Trump, had to orchestrate a 1-for-15 reverse stock split last week to remain listed on Nasdaq.

On the flip side, Galaxy is undervalued compared with former Bitcoin miners like TeraWulf Inc. and Cipher Digital Inc., which have enthusiastically embraced AI. They also tend to provide data-center spaces and access to power rather than GPUs or compute power directly.

Building on prior comments about whether to separate Galaxy’s AI business into a new entity, Novogratz said the company “probably” will, without offering a timeline. Investors are giving the company a $10 billion market value, as they weigh its crypto prospects against its AI ambitions.

“We have a lot of questions about splitting the company in two — we look at that seriously,” Novogratz said. “We probably will do that.”

Follow-up messages about this idea, which has been bandied about for a while, suggest it may not happen any time soon. Galaxy is well aware of a desire among investors to unlock value from the AI operation. Management is just not sure it’s the right thing to do at this moment.

That’s partly because Galaxy is still building out its AI operation. And it’s doing so in a state where the politics are relatively favorable — even if there are country-wide protests, including in Texas, about AI data centers sucking up power and water, while raising utility prices for regular people.

“Texas has been a great place to anchor and build,” said Christopher Ferraro, Galaxy’s president and chief investment officer.

Novogratz foresees a multi-state future for the business, but Galaxy’s next several sites are likely to be in Texas, where it already has staff, relationships and experience navigating requests from ERCOT. He suspects Wall Street will eventually reflect Galaxy’s AI ambitions in its valuation.

“We are undervalued versus our ambition and versus our peers,” Novogratz said. “But markets have a way of sorting that out over time.”