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Since the debut of OpenAI’s ChatGPT in November 2022, numerous tech companies have been swiftly advancing to develop comparable, if not superior, versions of such conversational AI models. Among them, tech titan Alphabet Inc. (GOOGL) has emerged as a prominent player.
Utilizing its extensive resources and employing top-tier talent to explore the frontiers of AI capabilities, GOOGL unveiled its largest and most capable AI model, Gemini (formerly known as Bard), in December last year.
This expansive language model consists of three variants: Gemini Ultra, representing its largest and most proficient category; Gemini Pro, designed to address a wide range of tasks across various scales; and Gemini Nano, tailored for specific functionalities and compatibility with mobile devices.
GOOGL’s CEO Sundar Pichai said this new era of models signifies one of the company’s most significant science and engineering endeavors. He expressed genuine excitement about the future and the opportunities Gemini will bring to individuals worldwide.
However, despite the CEO’s enthusiasm, Gemini failed to garner the same level of traction as ChatGPT. According to web analytics company Similarweb, Gemini currently ranks as the third most popular AI chatbot, trailing significantly behind ChatGPT in terms of traffic.
To make matters worse, Gemini has encountered multiple controversies over the last month, resulting in a notable downturn for GOOGL. According to the Gemini chatbot, one should never misgender a person, even if it could prevent a nuclear apocalypse.
This stance was revealed in response to a hypothetical question posed by a popular social media account, which asked if misgendering Caitlyn Jenner, a prominent transgender woman, could prevent such a catastrophe. Gemini’s “woke” response to the post received major criticism from social media users.
Additionally, the controversy surrounding Google’s Gemini intensified as its image-generating platform was slammed for producing racially inaccurate depictions of historical figures, occasionally substituting images of White individuals with those of Black, Native American, and Asian descent.
Tesla, Inc. (TSLA) CEO Elon Musk expressed concern over these “woke” responses, particularly emphasizing the widespread integration of Gemini across GOOGL’s products and YouTube.
Musk tweeted about a conversation with a senior GOOGL executive, who informed him it would take a few months to address the issue, contrary to earlier expectations of a quicker resolution.
While GOOGL has issued several apologies and halted the use of Gemini’s image-generating platform, a former GOOGL executive disclosed that investors are expressing profound frustration as the scandal involving the Gemini model evolves into a tangible threat to the tech company.
On the other hand, CEO Sundar Pichai reassured stakeholders, affirming that the company is actively working “around the clock” to address the issues with the AI model. Pichai condemned the generated images as “biased” and “completely unacceptable.”
Furthermore, GOOGL recently introduced an update to Gemini that allows users to modify inaccurate responses and provides them with increased control over the platform. Reportedly, GOOGL experienced a loss of approximately $90 billion in market value last month, fueled by the controversy surrounding Gemini.
Also, GOOGL made history as the first company to face a hefty fine for its AI training methods. French regulators imposed a penalty of approximately $270 million on the tech giant. The regulatory authority stated that the company breached a pledge by using content from news outlets in France to train its generative AI model, Gemini.
Bottom Line
As GOOGL grapples with the fallout from Gemini-related controversies, its reputation among investors has taken a significant blow. The company’s AI chatbot faced enhanced backlash from individuals and prominent public figures such as Elon Musk.
Sergey Brin, the co-founder of GOOGL, acknowledged Gemini’s historical inaccuracies and questionable responses. He stated that Google “definitely messed up on the image generation” and attributed the issue to insufficient testing.
However, he highlighted that GOOGL is not alone in grappling with challenges. Various AI tools, including ChatGPT and Elon Musk’s Grok services, struggle to generate accurate results. He noted that these tools sometimes produce peculiar responses that may seem politically skewed.
Despite these challenges, Brin maintains confidence in GOOGL’s position, emphasizing his belief in the tech company’s capabilities to adapt and innovate its business models.
Furthermore, GOOGL continues to lead the way in the field of AI. Talks between GOOGL and Apple Inc. (AAPL) about integrating Gemini’s generative AI technology with iPhones have sparked a significant surge in the stock prices of both companies.
A partnership with AAPL would give GOOGL and Gemini a reassuring vote of confidence, particularly given the recent controversies surrounding its “woke” chatbot and the generation of inaccurate images.
Wedbush analyst Scott Devitt sees the potential deal as a validation moment for GOOGL’s generative AI positioning. The firm rates GOOGL “outperform” and has a 12-month price target of $160. Devitt emphasized that this collaboration represents a significant opportunity for GOOGL to integrate into the AAPL ecosystem.
In conclusion, while GOOGL faces challenges and scrutiny due to controversies surrounding Gemini, the company continues demonstrating determination to adapt and thrive.
Furthermore, talks with AAPL regarding the potential integration of Gemini’s technology signal promising opportunities for GOOGL and its generative AI model. Consequently, in light of this significant development, adopting an entirely bearish stance on GOOGL might not be prudent. Thus, investors could closely monitor the stock for potential gains.

Marathon Digital Holdings, Inc. (MARA), a prominent player in supporting and securing the Bitcoin ecosystem, boasts a solid financial position. As of February 29, 2024, it had nearly $1.5 billion in unrestricted cash and cash equivalents and bitcoin. This substantial financial firepower plays a crucial role in enabling the company to execute its expansion strategy with agility and effectiveness.
Acquisition of 200MW Bitcoin Mining Data Center
On March 15, 2024, MARA finalized a deal to purchase Applied Digital Corporation’s Bitcoin mining data center in Garden City, Texas. The data center, which has a capacity of 200 megawatts (MW), will be acquired for $87.3 million, translating to roughly $437,000 per megawatt. The acquisition will be funded entirely through cash reserves from Marathon’s balance sheet.
The Bitcoin mining data center in Garden City, Texas, is located adjacent to a wind farm and is predominantly powered by renewable energy. The site, constructed and energized in 2023 with a workforce of about 25 employees, currently converts around 100 megawatts (c. 4.5 exahash of miners) into economic value through Bitcoin mining.
With the acquisition of this data center, MARA will take direct ownership of its current on-site operations and plans to expand by another 100 megawatts in 2024, totaling 200 megawatts dedicated exclusively to its Bitcoin mining operations.
This move provides Marathon with secure ownership of its operations and expansion opportunities. It also anticipates a 20% reduction in the cost per coin of its current operations at the site. Subject to customary conditions, the transaction is set to close in the second quarter of 2024.
The recent transaction marks Marathon’s second significant acquisition of Bitcoin mining data centers in the past four months, further bolstering its self-owned and operated megawatts to 54% in its Bitcoin mining portfolio. Before the acquisition of its first two data centers, which closed in January, MARA’s Bitcoin mining portfolio included 584 megawatts, with 3% residing on sites directly owned and operated by the company.
With this strategic acquisition and the planned expansion of the site in 2024, Marathon’s Bitcoin mining portfolio is set to increase to 1.1 gigawatts, with 54% under its direct ownership and operation, all of which are diversified across eleven sites on three continents. As a result, MARA will directly own and operate more megawatts than it had in its entire Bitcoin mining portfolio in December 2023.
In January this year, MARA finalized the acquisition of two operational Bitcoin mining facilities in Texas and Nebraska from subsidiaries of Generate Capital, PBC. Under the deal, the company paid around $179 million in cash from its balance sheet for approximately 390 MW of mining capacity. It also terminated rival Hut 8 Corp’s (HUT) involvement in overseeing the facilities.
Preparations for the Bitcoin Halving
Marathon Digital’s timing in acquiring the Bitcoin mining data center, located next to a wind farm with a capacity of 200 MW, is strategic, coinciding with its preparations for the upcoming Bitcoin halving, which is expected around April 20. This event, slashing per-block rewards by half from 6.25 BTC to 3.125 BTC, can strain smaller and less efficient miners with higher energy costs and limited capital access.
Miners with higher electricity costs or lower-efficiency machines “will have a difficult time mining profitably post-halving,” said Ethan Vera, Luxor Technology’s Chief Operating Officer. “Many companies are stuck in power contracts, or benefit from top line gross revenue and as such might continue to mine despite not being profitable. Companies’ balance sheets will determine how long they can survive doing that.”
MARA, an already leading player in the mining space, reported an energized self-mining hash rate of 28.7 exahashes per second (EH/s) at the end of February 2024.
During last month’s earnings call, Marathon executives said they would use its balance sheet, comprising roughly $1 billion worth of unrestricted cash and bitcoin, to approximately double its hash rate to 50 EH/s by the end of 2025. In 2024, the company plans to increase its hash rate to nearly 35 to 37 exahash.
Moreover, MARA is preparing aggressively for the next Bitcoin halving with plenty of cash in hand.
“We have the need for more capacity, we are reaching that limit now as we speak but we will continue to be acquisitive in this space,” Marathon’s chief executive, Fred Thiel, said in an interview on Bloomberg Television. “That has a direct impact on our cost to mine, which lowers our break-even point.”
Marathon Digital is enhancing its infrastructure and increasing the number of its mining devices to keep costs low after the halving event, which will significantly reduce its revenues. The company estimates that the break-even point, where revenue covers the cost of 1 BTC after halving, will be $43,000. 
Fred Thiel said, “By simple calculation, if the industry average breakeven point was previously around $23,000 per Bitcoin, it will now be around $43,000.” Thiel mentioned that some miners will lose their profitability, and perhaps some will have to consider discontinuing their mining activities.
The latest announced purchase is consistent with Marathon’s proactive approach of scaling up its operations before the upcoming bitcoin halving, slated in April, which aims to alleviate potential financial pressures and capitalize on the opportunities in the market.
MARA is not the only mining company preparing for the bitcoin halving. Companies like Riot Platforms, Inc. (RIOT) and CleanSpark, Inc. (CLSK) are also making substantial investments to increase their mining capacities. For instance, last month, Riot Platforms purchased 31,500 next-generation M60S miners from MicroBT for $97.40 million.
On the other hand, CleanSpark acquired three Bitcoin data centers in Mississippi, indicating a strategic move to bolster its mining infrastructure. Hut 8, led by CEO Asher Genoot, has outlined growth plans that focus on cost-effective scaling strategies.
Bottom Line
MARA, one of the largest U.S. bitcoin mining companies, reported outstanding financial and operational results for the fourth quarter and fiscal year ended December 31, 2023. For the full year, Bitcoin production rose 210% year over year to a record 12,852 BTC. The company’s revenues grew 229% from the prior year to $387.50 million in 2023.
Furthermore, Marathon’s net income grew to a record of $261.20 million, or $1.06 per share, from last year’s net loss of $694 million, or $6.12 per share. Also, its adjusted EBITDA improved to $419.90 million from a loss of $543.30 million in 2022.
Marathon Digital, with a combined balance of unrestricted cash and cash equivalents and bitcoin of nearly $1.5 billion as of February 29, continues to build liquidity on the balance sheet to capitalize on strategic opportunities, including industry consolidation. Recently, the company announced buying a 200 MW capacity Texas Bitcoin mining facility owned by Applied Digital for nearly $87 million in cash.
Along with taking direct ownership of its current operations at the site, the company added Marathon intends to grow its presence at the facility by 100 MW by the end of 2024. This planned purchase is consistent with MARA’s strategy to scale up its operations ahead of the next bitcoin halving event, slated for around April 20.
Also, in January, Marathon Digital closed the acquisition of two Bitcoin mining facilities in Texas and Nebraska from subsidiaries of Generate Capital, PBC. It paid around $179 million for 390 MW of capacity.
As the halving event is expected to put financial stress on companies in the mining sector, notably smaller, less-efficient miners with high energy costs and limited capital access, the recent mergers and acquisitions (M&A) emphasize MARA’s consistent efforts to mitigate potential challenges and capitalize on several opportunities in the market.
With MARA’s strong financial position enabling the company to execute its expansion strategy effectively, investors could consider buying this stock now.