Telegram AI ambitions revealed! TON ecosystem invests $420 million to deploy Nvidia B200 GPUs

Nasdaq-listed token reserve company AlphaTON Capital Corp has filed a $420.69 million shelf registration application. The funds will be used to expand AI and high-performance computing infrastructure to support Telegram’s Cocoon AI network and to drive M&A of revenue-generating companies within its ecosystem. The company has already deployed Nvidia B200 GPUs to Cocoon, adding a new revenue stream to its business.

Strategic Positioning of Cocoon AI Network and the GPU Arms Race

(Source: AlphaTON)

This funding will help AlphaTON finance its “ambitious expansion” of artificial intelligence and high-performance computing infrastructure to support Telegram’s Cocoon AI network. Cocoon, short for Telegram’s Confidential Compute Open Network, is a decentralized AI computing platform developed by Telegram and built on the TON blockchain.

Cocoon’s business model allows users to rent out their GPUs to process AI queries in exchange for Toncoin as rewards. The concept of decentralized AI computation isn’t new, with projects like Render Network and Akash Network already exploring this field. However, Cocoon’s unique advantage is its deep integration with Telegram. With 900 million monthly active users, if Cocoon can attract even a small portion of users to contribute GPU power, it would create a massive distributed computing network.

On Monday, AlphaTON announced it had deployed a batch of Nvidia B200 GPUs to Cocoon, “adding a new revenue stream to its business.” The Nvidia B200 is the latest generation of AI training chip, priced at over $30,000 each and offering performance far superior to the previous generation. AlphaTON’s deployment of these top-tier GPUs demonstrates its strategic position as a computing power supplier within the Cocoon network.

The economic logic of this strategy is: as AI applications explode, computing demand continues to grow, and those with GPU computing power will earn steady rental income. If Cocoon truly becomes the main computing power provider for AI applications in the Telegram ecosystem, AlphaTON, as an early large-scale investor, will gain a first-mover advantage and benefit from economies of scale. However, there are risks to this strategy: GPU hardware investments are significant, depreciation is rapid, and if Cocoon fails to attract enough AI query demand, these GPUs may remain idle and result in losses.

M&A Strategy and Integration into the Telegram Ecosystem

(Source: The Block)

According to the announcement, AlphaTON plans an acquisition strategy targeting “revenue-generating companies within the Telegram ecosystem.” AlphaTON noted it has already identified several “high-potential acquisition targets,” including startups focused on payments, content distribution, and blockchain services within the open network ecosystem. The funds will also be used to build AlphaTON’s TON token reserve and “other related digital assets.”

This M&A strategy represents a major transformation in the business model of Digital Asset Technology (DAT) companies. Early DATs like MicroStrategy had a very simple model: raise funds to buy coins, hold and not sell, then wait for appreciation. But as the market premium for pure holding companies declines, a new generation of DATs is seeking more diversified revenue streams. AlphaTON’s strategy involves not only holding TON tokens but also investing in and acquiring operating companies within the Telegram ecosystem to earn operational income beyond just token appreciation.

For example, the company revised its deal to acquire a 60% stake in mobile gaming platform GAMEE for $15 million, and plans to acquire up to $4 million worth of GMEE and Watcoin tokens on the open market. In addition, the company plans to launch a co-branded TON Mastercard in December through partnerships with PagoPay and ALT5 Sigma. These moves show AlphaTON is building a comprehensive investment portfolio within the Telegram ecosystem.

As market demand for public crypto holders appears to cool, other DATs are also seeking to expand through infrastructure services and acquisitions. In November last year, amid shrinking managed net asset value (mNAV), AlphaTON said it had shifted most of its balance sheet into Toncoin and staking positions, while exploring additional expansion opportunities.

Top Venture Capitalists’ Contrarian Bet Logic

Earlier this year, the Open Network Foundation (TON Foundation) stated that a group of prominent VCs—including Benchmark, CoinFund, Draper Associates, Sequoia Capital, and Skybridge—had invested over $400 million in Toncoin cryptocurrency. According to reports, Coinbase Ventures is also a TON shareholder. Many of these investors participated in the Series A funding round for The Open Platform, led by Ribbit Capital, bringing its total funding to $70 million.

What’s the logic behind these top VCs’ bets? Telegram boasts 900 million monthly active users—a user base any blockchain would dream of. If TON can successfully convert Telegram users into blockchain users, its potential market size would far exceed all current public chains. Firms like Sequoia Capital and Benchmark value this “billion-user entry point” as a strategic asset; even with the current price plunge, the long-term outlook is still worth the bet.

After raising $36.2 million in private placement and securing a $35 million loan from BitGo Prime, AlphaTON launched its TON token reserve program in September. The company said its goal is to purchase about $100 million worth of TON tokens and invest in the mini-app ecosystem. BitGo, Animoca Brands, Kraken, and SkyBridge all serve as AlphaTON advisors, giving it an advisory lineup spanning custody, gaming, exchanges, and asset management.

“Escaping SEC restrictions on ‘small-scale offerings’ for fundraising marks a significant milestone in AlphaTON Capital’s transformation into a next-generation decentralized AI infrastructure leader,” said CEO Brittany Kaiser. “Once effective, this registration statement will give us financing flexibility to rapidly and decisively seize transformational opportunities.”

ATON closed up over 7.5% on Thursday, now trading at $1.71. This rebound suggests the market’s initial approval of the financing plan, with investors betting AlphaTON can leverage these funds to secure a strategic position in the TON and Telegram ecosystems.

The Ecological Crisis Behind TON Token’s 80% Crash

At its peak, the TON token’s market cap ranked among the top ten, hitting a high of $8.25. Since then, the token price has dropped nearly 80%, currently trading at $1.80, according to The Block’s price page, with its market cap ranking falling to 40th place. This sharp decline happened in just a few months, reflecting the crypto market’s loss of confidence in the TON ecosystem.

TON (The Open Network) is a Layer 1 blockchain originally conceived by Telegram founder Pavel Durov. After Telegram faced legal pressure from the US SEC due to its $1.7 billion ICO, it officially abandoned development of its custom blockchain. Multiple community-led projects then emerged, with The Open Network being one of them—a high-performance blockchain designed for seamless integration with the popular Telegram Messenger app.

TON once rose to fame due to its “mini-app” games like Notcoin and Hamster Kombat, which reportedly attracted millions of Telegram users. The popularity of these mini-app games made TON one of the hottest public chains in 2024, with daily active users and transaction volumes hitting record highs. However, this game-driven boom proved unsustainable.

As the novelty of mini-app games faded, user retention plummeted. Notcoin and Hamster Kombat’s daily active users dropped from tens of millions at their peak to just a few million, with many users leaving the ecosystem after collecting airdrops. This “come-and-go” user pattern exposed TON’s fundamental problem: a lack of deep application scenarios. When users only come for airdrops instead of genuinely using blockchain services, it’s difficult for the ecosystem to build long-term value.

Four Main Reasons for TON’s Token Crash

Decline in Mini-App Popularity: Notcoin and Hamster Kombat user retention rates plummeted

Lack of Application Scenarios: Aside from games, there is a lack of mature DeFi, NFT, and other applications

Overall Market Correction: The crypto market broadly fell from its 2024 highs

Telegram Legal Risks: Regulatory concerns sparked by Pavel Durov’s arrest in France

Despite the price crash, the TON ecosystem has not completely collapsed. The blockchain infrastructure is still running, the developer community remains active, and Telegram’s 900 million monthly active users are still TON’s biggest potential advantage. AlphaTON’s decision to file a large-scale fundraising application during this downturn shows its confidence in TON’s long-term value—or at least a strategic contrarian bet on the ecosystem.