China-based Bitcoin mining hardware manufacturer Canaan is expanding its footprint in the United States. The company purchased the 49 percent shares of Cipher Mining, which provides services in the field of cryptocurrency mining, in three active facilities in Texas for $ 39.75 million. Within the scope of the acquisition, a partnership structure was established at Alborz LLC, Bear LLC and Chief Mountain LLC facilities. The majority of these facilities are owned by the renewable energy company WindHQ.
Capacity of Facilities and Operational Power
The three facilities that came under Canaan’s management as a result of the acquisition have a total energy capacity of 120 megawatts. Combined, the facilities have the potential to generate approximately 4.4 exahash/second of computing power. With the agreement, 6,840 Avalon A15Pro model mining devices were also taken over from Cipher. This equipment was operating at Cipher’s facility, formerly known as Black Pearl, which is currently being converted into an artificial intelligence and high-performance computing (AI-HPC) center.
Financing and Share Transfer
Canaan issued over 806 million Class A shares to finance the share purchase. The underlying shares were valued at approximately 54 million American Depository Shares (ADS) and were priced at $0.7394 each. Additionally, a sales restriction valid for six months has been imposed on these shares.
Canaan Chairman and CEO Nangeng Zhang stated that the investment contributes to the company’s long-term hardware-integration strategy. Zhang pointed out that the projects in question in Texas offer electricity prices below the market average, and this plays a fundamental role in increasing operational efficiency.
Nangeng Zhang, the company’s CEO, stated that this agreement is an important step in Canaan’s plan to combine its own equipment with high-efficiency energy infrastructure.
Canaan increased its revenue by more than 121 percent in the last quarter compared to the same period last year. According to the company’s financial report, total revenue reached 196 million dollars, while income from Bitcoin mining increased by approximately 99 percent to 30.4 million dollars. The company has 1,750 BTC in reserve.
Trend towards Artificial Intelligence in the Mining Industry
Canaan’s strategic investment in the USA coincides with a period when mining companies are turning to new areas in the face of shrinking profit margins. With the decline in revenues from crypto mining, many industry players have started to switch to artificial intelligence and cloud computing projects.
Recently, MARA Holdings gained direct access to artificial intelligence services by acquiring a 64 percent stake in France-based technology company Exaion. Companies operating in the sector such as Hive Digital Technologies, Hut 8, TeraWulf and Iren have also entered the process of converting mining facilities into data centers.
Some companies, such as CoreWeave, have transitioned to completely artificial intelligence-focused service models. These developments show that the crypto mining industry is not limited to the blockchain field and is starting to adapt to technological transformation.
