Hyperscale Data has ceased its Bitcoin mining operations at its data center in Michigan and is preparing to hand over the facility for use by a AI cloud computing customer. The company stated that this move is aimed at consolidating power, infrastructure, and on-site resources to advance the transformation of the data center.
The contract term can be up to 20 years at most.
The company's latest disclosure shows that the initial term of this contract is 10 years, covering a capacity of 20 megawatts. The customer is an unnamed AI cloud computing service provider based in California. If the other party exercises the option to renew the contract twice for additional 5-year periods each time, the cumulative revenue from the contract could exceed $1.2 billion.
The company also stated that customers have the option to increase their capacity by another 32 megawatts within the first two years. If the capacity expansion option and both renewals are successfully implemented, the total contract revenue is expected to exceed $3 billion.
Miners will be sold, the launch time of AI business has not been disclosed.
According to Hyperscale, the mining operations at the Michigan site were ceased on September 1st, and there are plans to sell the mining machines thereafter, with the expectation that such sales will generate revenue. However, the company has not specified the exact timeline for the launch of AI business.
In the announcement, management stated that after shutting down mining operations, the team can prioritize the use of the facilities' electricity and infrastructure for customer deployments. The company also mentioned that its current market value is discounted compared to some data center companies, and as the contracted power capacity is gradually realized, its valuation may improve.
Mining companies turning to AI has become an industry trend
In recent months, there has been a continuous increase in cases where mining companies have converted their existing sites into AI computing power facilities. With the rising computing demands of AI, mines that have access to electricity, land, and cooling conditions are now considered as infrastructure resources that can be rapidly transformed.
However, the cost of such transformation is not low. Last month, when the mining company IREN announced its quarterly results, it mentioned that its AI cloud business revenue exceeded Bitcoin mining revenue for the first time. However, it also confirmed an asset impairment of $450.4 million, which was mainly related to the decommissioning of mining machines.
Additional information:Hyperscale This shutdown only affects the Michigan site; the announcement does not specify whether other mining facilities of the company will be adjusted accordingly.
