Infrastructure providers, such as Northern Data (NB2), are well positioned to benefit from the growing demand from artificial intelligence (AI) and high-performance computing (HPC) firms, broker Canaccord Genuity said in a report Thursday initiating coverage of the stock.

Canaccord assumed coverage of the shares with a buy rating and a 60 euro ($62) price target. The stock was trading 2.4% higher at 45.65 euros at publication time.

Companies like Northern Data are “building the railroad for the AI gold rush,” analysts led by Kingsley Crane said. The company’s Taiga Cloud business has come online at the “forefront of what is shaping up to be a generational opportunity.”

The broker noted that Northern Data, which is 52% owned by stablecoin issuer Tether, has already announced it was exploring options to sell its Peak Mining business.

A potential divestiture would give Northern Data cash to invest in GPUs and data-center facilities, and would “meaningfully improve the company’s growth runway beyond FY25,” the report said.

The shares still offer potential upside despite the 74% rally in the last three months, Canaccord said, adding that “investor appetite is evident.”

Read more: Bitcoin Miner Northern Data Moves to Dismiss Ex-Employees’ Whistleblower Suit

The recently launched Destra crypto, DSYNC, leaps as high as 32% following an announced 0% tax from Destra. DSYNC is the native token of Destra network, a decentralized AI computing platform.

According to data from CoinGecko, DSYNC has gone up by more than 30% in the past day of trading. At the time of writing, it is trading hands at $0.406. At the beginning of December, DSYNC reached a new all-time high, surging to more than half a dollar. The token’s current price is only 22% lower than its recent ATH.

In the past week, DSYNC has been on an upward trend. The token has gone up by more than 21%. However, it has gone down by 7.6% in the past month of trading.

A day before DSYNC’s price surge, the Destra Network announced via an X post that DSYNC is now tax free. Shortly after the announcement, the token spiked by 13% before seeing bigger gains the day after.

It is possible that the recent boost was fueled by the broader AI token rally. According to data from CoinGecko, the total market value of AI meme coins crossed the $10 billion threshold, increasing by nearly 30% in the past 24 hours. At the time of writing, its combined market cap is nearing $11 billion.

The Destra Network is known for its optimization of AI technology within the blockchain and cloud solutions using GPU. The project has been a champion of using decentralized AI agents.

According to its X account, Destra is in the process of developing a platform called Destra Sentient, that would provide traders with specially designed AI agents that “think like humans, communicate naturally, and bring a new level of interaction to your digital world.”

As previously reported by crypto.news, major networks such as ZKsync and Ripple Labs have made strides to combine AI and blockchain technology, whether it is through partnering with AI platforms or launching their own.

According to Syncracy Capital, AI technology is still fairly new to the crypto space, with only 1% of the total crypto market cap credited to AI-integrated projects. Though, this may soon change as AI tokens continue to reign.

Centralized data networks, ones that are owned and/or managed by a single entity, have been structurally broken for years. Why? Single points of failure. If one entity (or even a few) has access to a database, then there is only one “point” to compromise in order to gain full access. This is a serious problem for networks holding sensitive data like customer information, government files, and financial records, and those with control of infrastructure like power grids.

Billions of digital records were stolen in 2024 alone, causing an estimated $10 trillion in damages! Notable breaches include nearly all of AT&T’s customer information and call logs, half of America’s personal health information, 700 million end-user records from companies using Snowflake, 10 billion unique passwords stored on RockYou24, and Social Security records for 300 million Americans.

Source: Statista, 2024

This is not just a private sector issue — governments and crucial national infrastructure also rely on centralized networks. Notable recent breaches include records on 22 million Americans stolen from the U.S. Office of Personnel Management, sensitive government communications from multiple U.S. federal agencies, personal biometric data on 1.1 billion Indian citizens, and the ongoing Chinese infiltration of several U.S. internet service providers.

Although hundreds of billions of dollars are spent each year on cyber security, data breaches are getting larger and happening more frequently. It’s become clear that incremental products cannot fix these network vulnerabilities — the infrastructure must be completely rearchitected.

Source: market.us, 2024

AI magnifies the issue

Recent advancements in generative AI have made it easier to automate everyday tasks and enhance work productivity. But the most useful and valuable AI applications require context, i.e. access to sensitive user health, financial, and personal information. Because these AI models also require massive computing power, they largely can’t run on consumer devices (computer, mobile), and instead must access public cloud networks, like AWS, to process more complex inference requests. Given the serious limitations inherent in centralized networks illustrated earlier, the inability to securely connect sensitive user data with cloud AI has become a significant hurdle for adoption.

Even Apple pointed this out during their announcement for Apple Intelligence earlier this year, stating the need to be able to enlist help from larger, more complex models in the cloud and how the traditional cloud model isn’t viable anymore.

They name three specific reasons:

1. Privacy and security verification: Providers’ claims, like not logging user data, often lack transparency and enforcement. Service updates or infrastructure troubleshooting can inadvertently log sensitive data.
2. Runtime lacks transparency: Providers rarely disclose software details, and users cannot verify if the service runs unmodified or detect changes, even with open-source tools.
3. Single point of failure: Administrators require high-level access for maintenance, risking accidental data exposure or abuse by attackers targeting these privileged interfaces.

Fortunately, Web3 cloud platforms offer the perfect solution.

Blockchain-Orchestrated Confidential Cloud (BOCC)

BOCC networks are like AWS — except built completely on confidential hardware and governed by smart contracts. Though still early days, this infrastructure has been in development for years and is finally starting to onboard Web3 projects and Web2 enterprise customers. The best example of this architecture is Super Protocol, an off-chain enterprise-grade cloud platform managed completely by on-chain smart contracts and built on trustless execution environments (TEEs). These are secure hardware enclaves that keep code and data verifiably confidential and secure.

Source: Super Protocol

The implications of this technology address all of Apple’s concerns noted earlier:

1. Privacy and security verification: With public smart contracts orchestrating the network, users can verify whether user data was transported and used as promised.
2. Workload and program transparency: The network also verifies the work done within the confidential TEEs, cryptographically proving the correct hardware, data, and software were used, and that the output wasn’t tampered with. This information is also submitted on-chain for all to audit.
3. Single point of failure: Network resources (data, software, hardware) are only accessible by the owner’s private key. Therefore, even if one user is compromised, only that user’s resources are at risk.

While cloud AI represents an enormous opportunity for Web3 to disrupt, BOCCs can be applied to any type of centralized data network (power grid, digital voting infrastructure, military IT, etc.), to provide superior and verifiable privacy and security, without sacrificing performance or latency. Our digital infrastructure has never been more vulnerable, but blockchain-orchestration can fix it.