Goodbye Bitcoin, Hello AI Data Center

Hyperscale Data has ended all Bitcoin mining at its Michigan data center and started converting the site into artificial intelligence computing capacity for a contracted customer, the company said September 2.

The Las Vegas-based company, which trades on the NYSE American under the ticker GPUS, said every Bitcoin miner at the facility was turned off effective September 1. The move follows the customer’s inspection of the site and the company’s own engineering, design, and equipment procurement work. Both sides agreed to end mining immediately so the facility could be readied for the transition.

Hyperscale Data is not the first Bitcoin miner to convert mining capacity into AI infrastructure. Core Scientific has been reworking its data centers to host AI computing for CoreWeave. Galaxy Digital is converting its Helios site in West Texas into an AI data center leased to CoreWeave. 

TeraWulf and IREN have similarly redirected mining sites and power toward AI and high-performance computing. The shift has accelerated as demand for AI capacity outpaces the returns from mining.

The customer is a California-based neocloud provider that Hyperscale Data has not named. Under a previously announced master services agreement, the provider has contracted for 20 megawatts of capacity. 

The agreement carries an initial term of 10 years with two five-year extension options. If the customer exercises those options for the full term, Hyperscale Data expects the contract to generate more than $1.2 billion in revenue.

The agreement also gives the customer the right to add 32 megawatts of AI compute capacity. If that option is exercised within the first two years and carried through both extensions, the company estimates total contract revenue would exceed $3 billion.

The Dowagiac, Michigan facility is expected to reach roughly 340 megawatts of power capacity. The current agreement would use about 20 percent of that. 

Hyperscale Data said it would retain the remaining 80 percent for additional customers and future AI expansion, subject to the development and availability of the planned power.

Read More: What a Hyperscale Data Center Actually Needs: Power, Water, Land

“We are pleased with the continued progress we are making at the Facility,” Chief Executive Officer William Horne said in a statement. He said shutting down mining lets the company focus the site’s power, infrastructure, and resources on preparing it for the customer, and argued that the company’s market capitalization trades at a discount to other data center operators relative to its contracted power capacity.

Horne pointed to a comment from VanEck’s head of digital asset research, who said earlier this year that Bitcoin mining companies able to repurpose existing sites for AI were “sitting on a gold mine” because they traded at a steep discount to traditional data center companies.

Hyperscale Data said it intends to sell the Bitcoin mining servers removed from the facility and expects to recognize additional gains from that sale.

The company describes itself as an AI data center company anchored by Bitcoin, until now. It operates the Michigan site through its wholly owned subsidiary Sentinum. Its other subsidiary, Ault Capital Group, is a hybrid private equity and operating company that Hyperscale Data expects to divest in 2027.

The company cautioned that its expansion plans remain preliminary and subject to risks, and that there is no assurance the additional capacity will ultimately be developed, financed, or built. Additional detail is available in the company’s filings with the U.S. Securities and Exchange Commission.