Bitcoin Miner Ditches Site for AI Deal That Could Top $1.2 Billion

Hyperscale Data shut down Bitcoin mining operations at its Michigan data center on Tuesday to make room for an AI customer whose contract could generate more than $1.2 billion over 20 years, the company said.

In an announcement on Wednesday, Hyperscale said the previously announced deal could generate more than $1.2 billion if the customer exercises both five-year extensions to the initial 10-year term. The agreement covers 20 megawatts of capacity for an unnamed California-based provider of cloud computing services for AI.

“The immediate shutdown of the Bitcoin mining operations allows our team to focus the Facility's power, infrastructure and resources in preparing the Facility for its usage by our Customer,” CEO William Horne said in the announcement.

According to Hyperscale, the agreement gives the customer an option to add 32 megawatts within the first two years. The company said exercising that option and both five-year extensions could bring total contract revenue above $3 billion.

“Further, as the expansion of the Facility to support AI computing infrastructure progresses, it is my belief that our stockholders will be rewarded as the Company's market capitalization, which currently trades at a significant discount to other data center companies, begins to normalize in comparison to its available contracted power capacity,” Horne added.

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Hyperscale plans to sell the mining servers and expects gains from those sales. It did not announce a start date for AI operations, and the mining shutdown concerns the Michigan site.

Other miners have been converting sites to serve AI customers. VanEck’s head of digital asset research, Matthew Sigel, argued in March that miners are “sitting on a gold mine " and could profit from repurposing their infrastructure as demand for AI computing grows.

The cost of that shift, however, can be substantial, as was evident in IREN’s quarterly results released last month: AI cloud revenue surpassed Bitcoin mining revenue for the first time, but the company also wrote down $450.4 million in asset values, mostly tied to mining equipment it had retired.