Canaan Inc. (CAN), a Singapore-based manufacturer of Bitcoin mining machines, will refocus on corecrypt operations, involving the artificial intelligence (AI) semiconductor business.
Despite the growing trend of Bitcoin miners diversifying revenues through AI-related businesses, building AI chips is likely to be extremely competitive and cost-effective for small and medium-sized businesses.
Canaan said the AI unit, which generated around $900,000 in revenue in 2024 (total revenue of $88.8 million), and accounted for 15% of the company's overall operating expenses, did not match the company's long-term strategy, the company said Monday.
“Doubling the core strengths of crypto infrastructure and Bitcoin mining is the most strategic path,” CEO Nanangeng Zhang said in a statement.
Before the move, the company said it had begun exploring options for AI units until March 2022. Currently, Canaan is hoping to phase out in the next few months, and expects costs to drop sharply once the exit is confirmed.
Canaan is best known for its Avalon Mining Rigs, one of the oldest brands of ASIC (Application-specific integrated circuit) miners built for Bitcoin. The company unveiled NASDAQ in 2019, and while continuing to develop mining hardware, it is expanding to self-mining and consumer mining products.
The decision after years of attempting to diversify into edge computing chips is little surprising given the focus of miners and mining chip makers on “made in America” bitcoin after winning Trump's US election.
Recently, benchmark Mark Palmer wrote in his study that it did not reflect the potential rise due to the expansion of the company's self-mining operations, particularly in the United States.
Canaan stock fell slightly on Monday, but the broader digital assets and stock markets were mostly positive. This year, the WGMI of Bitcoin Mining ETFs fell by about 20%.
