Galaxy Digital, a leading Bitcoin mining firm, is exploring a transition to AI technology in response to the growing competition and increasing mining difficulty in the sector. The company recently announced in its third-quarter earnings report that it is in preliminary discussions with a US hyperscaler, a large data center operator, to potentially convert its 800-megawatt Helios mining facility in West Texas into a high-performance computing (HPC) facility for AI applications.
Currently, the Helios facility has 200 MW in operation, with plans to secure an additional 1.7 GW of power capacity for the site. However, the decision to shift towards AI will depend on thorough due diligence and necessary approvals.
This move towards AI is not unique to Galaxy Digital, as other major mining companies like Riot Platforms and Marathon Digital are also considering similar expansions. Core Scientific, another prominent player in the industry, has already entered into a lucrative partnership with AI-focused hyperscaler CoreWeave, projecting over $8 billion in revenue over 12 years.
Industry analysts predict that Bitcoin miners who integrate AI into their operations could unlock new revenue streams. Asset management firm VanEck estimates that miners could potentially generate up to $14 billion in annual profits by 2027 by allocating 20% of their energy resources to AI computations.
Despite the challenges facing Bitcoin miners, Galaxy Digital reported a 27% decrease in Bitcoin production in the third quarter, mining only 176 BTC. Revenue from mining also declined by 23% to $18.5 million. However, the company saw an 11% increase in its hashrate, reaching 6.2 exahashes per second.
Galaxy Digital reported a net loss of $54 million for the quarter, an improvement from the previous quarter’s net loss of $177 million. The company experienced over 30% growth in operating revenue quarter-over-quarter, with a net income of $191 million primarily driven by strong operations and favorable market conditions for digital assets.
Galaxy is also in the process of reorganizing to become a Delaware-based corporation listed on the Nasdaq, pending final SEC review and approvals.
This shift towards AI in the mining sector reflects a broader trend towards leveraging advanced technologies to enhance operations and generate new revenue streams. As Galaxy Digital and other mining companies explore the potential of AI, the industry may see significant transformations in the coming years.