Can Tether’s $1.15B AI Robotics Bet Help It Stay on Top After the GENIUS Act?

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This article was first published on The Bit Journal: How will Tether’s move into the AI-powered robotics field via a new partnership reshape the fortunes of the world’s leading stablecoin issuer?

The world’s leading stablecoin issuer, Tether Holdings SA, is reportedly expanding into the AI-powered robotics field even as it ramps up its investments in other commodities, such as oil. The stablecoin issuer is eyeing a $1.15 billion funding deal with German startup Neura to expand its presence into the artificial intelligence space.

Tether Holdings and Neura

According to a Bloomberg report, the deal between Tether Holdings and Neura aims to diversify the firm’s investments into AI-powered robotics, as well as other commodities such as oil and agricultural products, to reduce revenue reliance on digital assets. The company has historically utilized its USDT stablecoin to finance agricultural operations within the Latin American market, but plans are in place to expand these operations.

Another report in the Financial Times magazine, citing people with “direct knowledge” of the matter, stated that the deal between Tether Holdings and Neura was valued between $9.3 billion and $11.6 billion. The new agreement now adds to the list of 140 other companies where Tether Holdings already backs as a stablecoin issuer, ranging from energy and finance to football teams, and now AI-powered robotics.

Explore other Opportunities

Neura, the company partnering with Tether Holdings, is creating robots designed to assist humans and AI in various applications, from business operations to streamlining production at manufacturing sites. The firm plans to manufacture over 5 million robots by 2030 to perform tasks, including household chores, as well as other duties. A statement from Tether Holdings said:

“We are actively exploring numerous opportunities to continue investing in frontier tech, but we won’t be disclosing any specific details until they are finalized.”

AI-powered robotics — The deal between Tether Holdings and Neura aims to diversify the firm’s investments beyond digital assets

Increasing interest in Robotics

While Tether Holdings remains a profitable Web3 Company with its stablecoin USDT market cap standing at about $184 billion at the time of writing and a 24-hour average trading volume of around $127 billion, the firm faces intense competition from institutional investors interested in entering the lucrative stablecoin market following the passing of the GENIUS Act. Data from CoinGecko currently shows that since the passage of the GENIUS Act, Tether Holding’s market dominance has decreased from 71.4% a year ago to approximately 62% currently.

To remain competitive in a rapidly growing field, Tether Holdings has continued to diversify its portfolio. For example, the company reported a $13.4 billion profit last year, with a significant portion of that coming from Treasury Holdings. However, Tether CEO Paolo Ardoino has recently shown increasing interest in the AI-powered robotics segment. Earlier this week, the stablecoin issuers inked a deal with Rumble and Northern Data to lease a share of the firm’s 20k GPU network to power its AI research.

Conclusion

The move by Tether Holdings to invest in AI-powered robotics comes at a time when many firms are integrating crypto capital with other applications beyond blockchain technology. This initiative provides Tether with an opportunity to diversify its income streams and outpace the incoming competition as other companies capitalize on the recently passed GENIUS Act. This development could set a precedent for future similar partnerships.

Glossary to Key Terms

Tether: This is the Company that issues Tether (USDT), which is the largest and most widely used stablecoin in the cryptocurrency market.

AI Robotics: The integration of artificial intelligence into physical robotic systems, enabling them to perform complex tasks with high levels of autonomy, adaptability, and intelligence.

Stablecoins: Cryptocurrencies designed to maintain a stable value by being pegged to a stable asset, such as the US dollar or other traditional currencies.

Frequently Asked Questions about Tether Holdings

What is Tether (USDT)?

Tether (USDT) is a stablecoin, a type of cryptocurrency designed to maintain a stable value by being pegged to a real-world asset, typically the US dollar on a 1-to-1 basis (1 USDT = 1 USD).

Who runs Tether?

Tether Limited manages and issues Tether tokens.

How are Tether Tokens backed?

Every Tether token in circulation is claimed to be 100% backed by Tether’s reserves, which include traditional currencies, cash equivalents, and other assets such as gold and treasury bills.