Galaxy Digital explores AI potential in response to Bitcoin mining slowdown
Galaxy Digital is the latest Bitcoin mining company to explore the move to AI as competition intensifies within the sector and mining difficulty increases.
In its third quarter earnings report released on November 7, Galaxy announced a preliminary agreement with an undisclosed U.S. hyperscaler (a large-scale data center operator) to potentially convert its 800 megawatt (MW) Helios mining facility in West Texas to high performance. I did it. Computing (HPC). Hyperscalers provide massive computing capacity to support demanding applications such as AI.
Currently, the Helios facility operates 200 MW, and Galaxy is investigating the feasibility of securing an additional 1.7 gigawatts (GW) of power capacity at the site. However, moving forward with this AI-centric plan requires thorough due diligence and necessary approvals.
Other major mining companies, such as Riot Platforms and Marathon Digital, are also considering AI expansion. Another popular miner, Core Scientific, is poised to generate more than $8 billion in revenue through its 12-year partnership with AI-focused hyperscaler CoreWeave.
This strategy follows predictions from industry analysts that Bitcoin miners embracing AI could create new revenue streams. Asset management firm VanEck estimates that Bitcoin miners could earn up to $14 billion in annual revenue by 2027 if they invested 20% of their energy resources into AI calculations.
Third quarter results
Galaxy’s third-quarter results further highlight the challenges faced by Bitcoin miners. The company reported that Bitcoin production fell 27%, with only 176 BTC mined in the third quarter, and mining revenue fell 23% to $18.5 million.
This decline comes despite Galaxy’s hashrate increasing by 11%, to 6.2 exahashes per second (EH/s). Galaxy attributed these results to the Bitcoin halving event in April, increased mining difficulty, and seasonal declines in energy use.
Overall, Galaxy reported a net loss of $54 million for the quarter, an improvement over the $177 million net loss in the previous quarter.
The company saw its operating revenue increase by more than 30% quarter-on-quarter, despite industry-wide declines in trading volume and the decline in the price of Ethereum. Galaxy added that it recorded net profit of $191 million due to strong operations and favorable market conditions for digital assets. As of September 30, Galaxy’s equity capital was $2.1 billion.
Meanwhile, Galaxy is progressing with its reorganization plan to become a Delaware-based company for listing on Nasdaq, pending final SEC review and necessary approvals.
