Canaan Inc., known for its pioneering ASIC bitcoin mining rigs, has announced the closure of its artificial intelligence (AI) semiconductor division to concentrate on its core expertise in Bitcoin mining infrastructure. Led by CEO Nangeng Zhang, the Singapore-based company intends to reallocate resources from the underperforming AI segment to enhance its operations in the crypto mining sector.
The decision follows prolonged efforts since March 2022 to divest or shutter the AI unit, which only generated approximately $900,000 in revenue in 2024 against total revenues of $88.8 million and accounted for 15% of operating expenses. This move is expected to significantly cut operating costs and bolster investment into bitcoin mining hardware and self-mining initiatives, potentially improving Canaan's competitive position in the crypto infrastructure market.
Canaan’s pivot aligns with strategies employed by other industry leaders like Bitmain and Ebang, who have also exited less profitable, non-core sectors to focus on bitcoin mining. Market analysts see this strategic realignment as a step towards sustainable growth and increased innovation within the mining hardware space. Despite a recent 71% decline in Canaan’s stock price this year, the company’s renewed focus may unlock future value, especially given growing emphasis on 'American Made' bitcoin mining operations.