Canaan Inc. (CAN), the Singapore-based producer of bitcoin mining machines, will wind down its synthetic intelligence (AI) semiconductor enterprise to refocus on its core crypto operations.
Regardless of the rising development of bitcoin miners diversifying their income by AI-related companies, constructing AI chips is probably going very aggressive and never cost-effective for smaller corporations.
Canaan stated that its AI unit, which introduced in nearly $900,000 in income in 2024 (versus total revenue of $88.8 million) and accounted for 15% of company-wide working bills, didn’t align with the agency’s long-term technique, the company said on Monday.
“Doubling down on our core strengths in crypto infrastructure and bitcoin mining is probably the most strategic path ahead,” CEO Nangeng Zhang stated within the assertion.
Earlier than the transfer, the corporate stated it started exploring choices for the AI unit way back to March 2022, together with promoting it or shutting it down solely. Now, Canaan expects to finish the phase-out within the coming months and anticipates a pointy drop in prices as soon as the exit is finalized.
Canaan is finest identified for its Avalon mining rigs, one of many earliest manufacturers of ASIC (application-specific built-in circuit) miners constructed for bitcoin. The agency went public on Nasdaq in 2019 and continues to develop mining {hardware} whereas additionally increasing into self-mining and shopper mining merchandise.
The choice, which comes after years of attempting to diversify into edge computing chips, is hardly a shock given the latest focus of miners and mining chip makers on “American Made” bitcoin after Trump’s U.S. election win.
Lately, Benchmark’s Mark Palmer wrote in his analysis that rig maker’s shares do not replicate upside potential from the growth of the corporate’s self-mining operations, particularly in america.
Canaan’s shares had been barely down on Monday, whereas the broader digital property and equities markets had been principally constructive. The inventory fell 71% this yr, whereas a bitcoin mining ETF, WGMI, declined about 20%.