Galaxy Digital, a prominent Bitcoin mining firm, is exploring the potential of artificial intelligence (AI) to counteract losses in mining revenue and maximize future opportunities. The company recently announced a preliminary agreement with a US hyperscaler to potentially convert its 800-megawatt Helios mining facility in West Texas for high-performance computing (HPC) purposes. This shift to AI comes in response to increasing competition and rising mining difficulty within the sector.
The Helios facility currently has 200 MW in operation, and Galaxy is looking into securing an additional 1.7 gigawatts of power capacity for the site to support AI-focused operations. However, the company will need to conduct thorough due diligence and obtain necessary approvals before moving forward with this plan.
Other major mining companies, such as Riot Platforms and Marathon Digital, are also considering expansions into the AI space. Core Scientific, for example, has formed a partnership with AI-focused hyperscaler CoreWeave that is expected to generate significant revenue over the next 12 years.
Industry analysts predict that Bitcoin miners who integrate AI into their operations could unlock new revenue streams. Asset management firm VanEck forecasts that miners dedicating 20% of their energy resources to AI computations could potentially generate up to $14 billion in annual profits by 2027.
In its third-quarter earnings report, Galaxy Digital reported a 27% decrease in Bitcoin production, mining only 176 BTC during the quarter. Despite an 11% increase in hashrate to 6.2 exahashes per second, revenue from mining declined by 23% to $18.5 million. The company attributes these results to the Bitcoin halving event in April, increased mining difficulty, and seasonal energy use patterns.
Despite these challenges, Galaxy reported a net loss of $54 million for the quarter, an improvement from the previous quarter’s net loss of $177 million. The company also saw 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’s equity capital as of September 30 stood at $2.1 billion.
Galaxy Digital is currently in the process of reorganizing to become a Delaware-based corporation listed on the Nasdaq, pending final SEC review and necessary approvals.
Overall, the move towards integrating AI into Bitcoin mining operations represents a strategic shift for industry players looking to adapt to changing market conditions and maximize revenue potential in the future.
