Bitcoin Mining Giant Bitmain Is Making a Major Pivot to AI

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Bitmain is the world’s undisputed leader in cryptocurrency mining hardware manufacturing. Now, it wants to fill a similar role in the artificial intelligence (AI) field as well.

Speaking in a rare interview, enigmatic Bitmain CEO Jihan Wu told Bloomberg that the company is channeling its expertise in developing application-specific integrated circuit (ASIC) chips toward a nascent AI division.

Wu explained that ASIC chips, which the company uses to produce powerful and efficient cryptocurrency miners, are also important components for particular types of deep learning.

Moving into this field provides the company with an excellent hedge, not only against a decline in the cryptocurrency market writ-large but also against a potential ban on mining from China’s government, which has already shown hostility toward other sectors of the cryptocurrency industry.

“As a China company,” he said, “we have to be prepared.”

Bitmain’s interest in AI is not new. The company has already released several products through Sophon, its AI chip brand, and it has announced plans to release two more chip generations in the coming months.

However, the scale of that interest may raise some eyebrows. The company, Wu said, believes that in five years as much as 40 percent of its revenue could come from its AI division.

That’s not an insignificant figure. Wall Street research firm Bernstein estimates that Bitmain made as much as $4 billion in operating profit last year, which makes it as or more profitable than chipmaking giant Nvidia.

While Bitmain is the far-and-away market leader in the cryptocurrency mining space, the company is currently playing catch-up in the AI field. That’s because Google — whose parent company Alphabet is worth $750 billion — already has a head start.

In this field, however, Bitmain has regulation on its side, because the Chinese government has effectively banned local companies from using Google’s chips. Consequently, Bitmain has a much more viable road to becoming the mainland’s AI market leader.

Featured Image from Shutterstock.

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Josiah is a full-time journalist at CCN. A former ancient and medieval literature teacher, he has been reporting on cryptocurrency since 2014. He lives in rural North Carolina with his wife and children. Follow him on Twitter @Y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.