Hyperscale Data shut down Bitcoin mining operations at its Michigan data center on September 1 to make room for an artificial intelligence customer. The company announced a contract that could generate more than $1.2 billion over 20 years if the customer exercises both five-year extensions to an initial 10-year term.
The agreement covers 20 megawatts of capacity for an unnamed California-based cloud computing services provider. According to Hyperscale, the customer has an option to add 32 megawatts within the first two years. Should the customer exercise that expansion option along with both five-year extensions, total contract revenue could exceed $3 billion.
"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.
Hyperscale plans to sell its mining servers and expects to realize gains from those sales. The company has not announced a start date for AI operations at the facility.
The shift reflects a broader industry trend. Other Bitcoin miners have been converting their facilities to serve AI customers as demand for computing infrastructure accelerates. However, the transition carries significant costs. IREN, another mining operator, reported that AI cloud revenue surpassed Bitcoin mining revenue for the first time in its latest quarterly results, but the company also wrote down $450.4 million in asset values, primarily tied to retired mining equipment.
