Bitcoin mining hardware demand weakens as miners weigh an AI pivot
Bitcoin mining equipment makers are reporting weak sales as several large miners explore using their power and data-center infrastructure for artificial intelligence and high-performance computing. The shift could open new revenue streams, but it is no guaranteed replacement for mining. Projects can be expensive, and several companies are still reporting substantial losses.
- Mining-rig makers say buyers are cautious about costs and payback periods.
- AI and HPC revenue is growing for some miners, but profitability remains uncertain.
- Strategies range from MARA’s dual focus to TeraWulf’s expectation that it will be effectively done mining by 2027.
- Accounting gains on Bitcoin holdings can lift reported profit without improving operating performance.
Mining rigs are harder to sell
Bitcoin miners use application-specific integrated circuits, or ASICs, machines built for the specialized calculations required by proof-of-work mining. Their economics depend on equipment prices, electricity costs, Bitcoin revenue and competition from other miners. A faster machine is not automatically a good investment if it costs too much or takes too long to pay for itself.
Canaan CEO Nangeng Zhang pointed to weak demand, elevated inventories and competition from AI operators for advanced chips. He did not specify which chip categories or supply constraints he meant. Bitcoin mining ASICs and AI accelerators are different products, so his comments do not mean AI companies are buying the same machines as Bitcoin miners.
“Even higher performing next-generation mining machines may be difficult to produce at a reasonable cost and generate adequate commercial returns, ” Zhang said.
Canaan reported Q3 product revenue of $4.8 million, down from $13.6 million in Q2. Zhang acknowledged a 96% year-on-year sales decline and said the “mining hardware industry is undergoing profound structural changes.”
Bitdeer, which makes its own SEALMINER rigs, reported $300, 000 in ASIC hardware sales in Q3, down 25% from Q2. That figure reflects hardware revenue, not the value or number of machines sold. Bitdeer has put some unsold rigs to work in its own mining operations instead.
Self-mining can keep equipment productive, but it does not eliminate the underlying risks. The company still has to cover electricity and operating costs while competing with other miners for Bitcoin rewards.
AI and HPC offer an alternative, not an automatic rescue
Miners may have assets that can support artificial intelligence and high-performance computing (HPC), including power access, buildings, cooling systems and experience operating data centers. The mining machines themselves generally cannot be repurposed as general-purpose AI computers. A transition depends on the site and its infrastructure, along with customers, networking, cooling upgrades, construction timelines and available power.
These projects can require significant capital. AI or HPC revenue shows that customers are spending, but revenue alone does not reveal whether a business is profitable or can replace mining income at scale.
TeraWulf is the clearest example of a miner shifting toward HPC. It reported Q3 revenue of $76.2 million, up more than 50% year-on-year. HPC lease revenue rose nearly ninefold to $63 million, while mining revenue fell 70% to $13.2 million. The company expects to be “effectively done with mining” when the calendar turns to 2027. That is a stated expectation, not a guarantee that the transition will happen on schedule.
Hive Digital is taking a less decisive approach. Its fiscal Q2 revenue was $84.9 million, including $8.8 million from BUZZ, its HPC business. That amounted to 10.3% of total revenue. CEO Aydin Kilic had previously forecast a shift from a 10% AI and 90% mining revenue mix in Q1 to 40% AI and 60% mining “within the next few months.” The reported Q2 figure does not show that the 40% target had been reached. The timing and reporting periods behind the forecast and results are not fully aligned here.
Kilic said Hive would consider ASIC purchases only if they offered an attractive 12-month return on investment after electricity costs. He also described the possibility of small, opportunistic orders at $3 per terahash, a measure of a machine’s computing capacity, to replace older equipment. Significant expansion is not planned, he said.
“So nothing significant, ” Kilic said of mining expansion.
Hive’s results also show why revenue growth needs to be weighed against costs. The company reported an operating loss of $78.5 million and a net loss of $78.7 million, citing rising operating costs, $55 million in depreciation and $31.2 million in equipment impairment charges.
MARA sells Bitcoin but keeps mining
MARA is pursuing mining and AI/HPC rather than treating one as a replacement for the other. The company says “mining remains a core business” and that it will direct power to whichever use offers the best risk-adjusted return. That means Bitcoin mining at some sites and contracted AI/HPC infrastructure at others.
MARA mined 2, 247 BTC in Q3, up 5% year-on-year. CEO Fred Thiel said the company was “taking advantage of the extremely low pricing of Bitcoin mining hardware today” to modernize its fleet. MARA says upgrades will depend on whether efficiency gains and expected payback justify the cost.
MARA has also sold Bitcoin from its treasury. It said Q4 sales generated $1.1 billion, with $750 million used to repay loans collateralized by BTC. CFO Salman Khan called Bitcoin “a strategic asset for us and we’re utilizing it methodically, ” citing debt repayment, acquisitions and share buybacks as potential uses. MARA has announced a repurchase program of up to $500 million.
Mining revenue was under pressure in Q3. MARA reported total revenue of $164.2 million, down 35% year-on-year. Revenue from block rewards fell 37% to nearly $145 million, while pool mining and hosting revenue declined 13% to $14.6 million.
MARA reported Q3 profit of $632 million, five times its profit in the same period a year earlier. That result included $885 million in fair-value gains on its remaining Bitcoin. These gains reflect an increase in the asset’s reported market value. They are not revenue generated by mining and can reverse if the price falls.
Bitdeer grows its mining operation as rig sales fade
Bitdeer reported Q3 revenue of $320.7 million, up 40% from Q2 and 89% year-on-year. It mined 3, 855 BTC, compared with 2, 694 in Q2. The company had overtaken MARA in mining hash rate earlier in the year. Hash rate measures the computing power a miner contributes to the network. Bitdeer’s use of its own unsold SEALMINER rigs was one factor in its growth.
Higher revenue did not translate into strong mining margins. Self-mining generated $217.5 million in revenue and $6.2 million in gross profit. Bitdeer’s AI Cloud revenue was $20.4 million, up from $14 million in Q2.
The company recorded a $125.5 million net loss, which it attributed to rising interest costs and fair-value changes on digital-asset loans and derivatives. In plain terms, changes in the market value of those financial instruments affected the reported result. They do not, by themselves, show how much cash the core businesses generated.
CEO Jihan Wu said he was “a little bit uncertain after the midterm election” about U.S. data-center projects, including the Rockdale, Texas, site. Delays, he said, could mean “a little bit higher cost.” Bitdeer plans to keep expanding mining operations, though Wu said it would slow the pace of new capital investment in the following year.
Wu also said Bitdeer had “no plan” to make ZCash mining rigs, citing fierce competition and other potential developers.
Canaan cuts back as it works to retain its Nasdaq listing
Canaan reported Q3 total revenue of $14.5 million, down from nearly $32 million in Q2. Mining revenue fell by nearly half to $9.5 million. The company cut operating expenses by about 15% but still recorded an operating loss of $43 million.
A rise in the reported value of Bitcoin in Canaan’s treasury helped it post a net profit of $8 million. The company ended the quarter with 1, 875 BTC. As with other miners, that accounting boost should be distinguished from profits earned through equipment sales or mining operations.
Canaan says it has until January 11, 2027, to meet Nasdaq’s $1 minimum share-price requirement. It has announced a $20 million share repurchase round within a program that could spend up to $100 million buying back stock over 12 months. It also announced a reverse split, exchanging every 25 existing American depositary shares (ADS) for one ADS. An ADS represents an interest in a foreign company’s shares traded in the United States.
A reverse split reduces the number of shares and mechanically raises the quoted price per share. It does not improve the underlying business, increase the company’s value or ensure it will meet Nasdaq’s requirements.
Canaan says its next-generation ASICs in development should meet market needs over the next several years. It plans to reduce ongoing research and development spending while retaining the ability to begin mass production when commercial conditions are right. The company has not specified what level of demand or pricing would trigger that decision.
Key questions about miners’ changing strategies
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Why is MARA selling Bitcoin?
MARA says it is using the proceeds to repay debt and may use Bitcoin as a strategic asset for acquisitions and share buybacks. It reported using $750 million from Q4 sales to repay BTC-collateralized loans. Other companies’ treasury decisions should be assessed separately.
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Is MARA quitting Bitcoin mining?
No. MARA says mining remains a core business and mined 2, 247 BTC in Q3, while considering AI and HPC uses for power at some sites.
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Why are mining-rig sales weak?
Canaan and Bitdeer reported weak hardware sales. Canaan cited customer caution, high inventories and concern about payback periods. Companies also pointed to competition for advanced chip capacity, though Bitcoin ASICs and AI accelerators are different products.
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Will AI and HPC replace mining revenue?
It is not clear yet. Some miners report growing HPC revenue, but losses, project costs and execution risks mean that growth alone does not show whether the new business can reliably replace mining income.
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Is Canaan certain to be delisted from Nasdaq?
No. It has until January 11, 2027, to meet the exchange’s $1 share-price requirement. Its buyback and reverse split may affect the share price, but neither guarantees compliance or improves the business on its own.
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Is TeraWulf leaving Bitcoin mining?
TeraWulf expects to be effectively done with mining by 2027 as it shifts toward HPC. That is the company’s stated expectation, not a certain outcome.
Different bets, same test
The companies are taking different paths. MARA is balancing mining with contracted AI/HPC opportunities, Bitdeer is deploying its own rigs while building other businesses, Hive is limiting mining expansion, and TeraWulf expects to leave mining by 2027. Canaan is cutting costs and waiting for better conditions to scale hardware production.
AI demand could give some miners’ infrastructure a valuable new use, but a power connection and a data-center building are only a start. Projects still need to get built, customers need to pay, and returns have to cover the costs. A new label for the business does not change those fundamentals.
