Here’s a deal bringing together artificial intelligence, predictive credit analytics, blockchain infrastructure and investment funding with the goal of boosting performance in auto finance.

On Wednesday, ETHZilla Corp., a technology company bringing decentralized finance infrastructure to traditional finance, announced the acquisition of a 20% fully diluted interest in Karus, which is a leading artificial intelligence platform for auto finance decisioning and portfolio analytics.

Pursuant to the transaction, ETHZilla plans to integrate Karus’s AI-driven underwriting into its blockchain infrastructure, enabling the tokenization of AI-modeled, risk-adjusted auto-loan assets.

As part of the transaction, ETHZilla acquired a 20% fully diluted ownership position in Karus in consideration for $3 million in cash and $7 million in shares of common stock of ETHZilla.

According to a news release, Karus is backed by Tacora Capital CEO Keri Findley, an asset-based lending and private-credit investor funded by Peter Thiel.

“Karus’s AI models are bringing the pricing and management of loan-level risk and cash flows into the future,” said McAndrew Rudisill, chairman and chief executive officer of ETHZilla. “Their AI delivers institutional-grade risk forecasting that we believe will enable us to structure and tokenize loan pools with greater accuracy and transparency.

“Under terms of the transaction, ETHZilla will also have access to Karus’s extensive network of auto loan originators, including over 20,000 car dealerships, credit unions, and banks as a source of potential portfolios for tokenization,” Rudisill continued in the news release. “This transaction provides ETHZilla an entry point into the approximately $1.6 trillion US asset-backed securities market, and we plan to leverage our relationship with Karus to become a leading player in bringing real-world credit on-chain.”

ETHZilla highlighted the strategic investment accelerates its expansion beyond traditional digital assets into large-scale real-world asset markets, which the company expects will help position it to meet “a growing institutional demand for transparent, on-chain securitization.”

ETHZilla plans to bring tokenization to AI-underwritten auto loans, enabling highly predictive borrower and collateral risk segmentation powered by Karus’s AI decisioning engine, which is trained on more than 20 million historical auto loan outcomes and analyzes over 1,000 variables across credit, vehicle, collateral, and macroeconomic data in real time.

Executives said Karus has already generated more than $5 billion in auto loan volume processed through its point-of-origination decisioning engine.

“We expect that this integration will enable investors to access transparent, risk-tiered exposure to auto credit with on-chain settlement and analytics,” executives added while noting the first tokenized portfolios are expected to launch in early 2026.

According to the news release, Liquidity.io is expected to serve as the exclusive digital-asset exchange for trading tokenized Karus-enabled auto loan portfolios, ensuring compliant, scalable market access for investors.

ETHZilla holds a 15% interest in Satsche, Liquidity.io’s parent company.

The company estimates that for every $100 million deployed in the Karus token, the assets are expected to generate $9 million to $12 million of adjusted EBITDA for ETHZilla.

“We believe that ETHZilla’s blockchain infrastructure will allow us to bring our data-driven insights directly to market,” Karus chief executive officer Aaron Travis said. “By pairing our AI with ETHZilla’s blockchain rails, we aim to turn predictive auto loan-performance data into a new, scalable digital fixed-income product.”

Karus is backed by a group of investors led by Stage Global Partners, which also includes Tacoma Venture Fund and Capital Eleven.

“We expect that this relationship will take Karus’s loan modeling from insight to execution,” Findley said. “We believe the Liqudity.io platform will be able to give Karus’s AI real-world reach by turning credit intelligence into investable digital assets.”