Galaxy Digital, the cryptocurrency financial services firm founded by Michael Novogratz, is making a decisive pivot toward artificial intelligence computing as its Bitcoin mining revenue continues to face headwinds from the April 2024 halving event.
TL;DR
- Galaxy Digital signed a non-binding deal with a U.S.-based hyperscaler firm to convert all 800 megawatts of mining capacity to high-performance computing
- Mining revenue fell 23% quarter-over-quarter despite an 11% increase in total hashrate
- Bitcoin mining difficulty topped 100 trillion for the first time on November 5, intensifying pressure on smaller operators
- The move mirrors similar pivots by Core Scientific, Hut 8, and HIVE toward AI infrastructure
- Galaxy shares jumped over 7% on the Toronto Stock Exchange following the announcement
Galaxy’s Helios Facility Becomes an AI Hub
The centerpiece of Galaxy’s transformation is its massive Helios mining facility in West Texas, which currently holds 800 megawatts of approved power capacity. Only 200 megawatts are actively mining today, with another 1.7 gigawatts under study for potential permitting. Under the proposed deal, all of that capacity could be redirected to host high-performance computers for AI workloads rather than Bitcoin mining rigs.
The agreement, detailed in Galaxy’s third-quarter earnings statement, reflects a broader industry trend where miners are leveraging their existing power infrastructure to attract AI compute clients. Hyperscaler firms — the large-scale data center operators that provide massive computing power — find Bitcoin mining sites attractive because they offer operation-ready power capacity that is significantly faster to deploy than building a data center from the ground up.
Industry analysts note that the rationale behind AI firms partnering with Bitcoin miners is straightforward: miners have operation-ready power capacity that can be deployed far faster than constructing a new data center from scratch. It represents a win-win scenario — miners diversify away from a brutally competitive sector while AI companies accelerate their infrastructure buildout to meet surging demand.
Mining Revenue Under Siege
The timing of Galaxy’s pivot is telling. The company reported that its mining revenue fell 23% from the previous quarter, even as its total hashrate increased by 11%. The decline stems from a combination of factors: Bitcoin’s fourth halving event in April 2024 cut block rewards in half, mining difficulty has been climbing steadily, and seasonal operational curtailments have further squeezed output.
Just two days before Galaxy’s announcement, Bitcoin mining difficulty crossed the historic 100 trillion threshold for the first time, reaching 101.65 trillion. The network’s seven-day moving average hashrate hit a record 755 EH/s, reflecting intense competition among miners. With miners collectively producing approximately 450 BTC per day — worth roughly $31.5 million at current prices — the sell-side pressure from mining operations remains substantial.
The AI Pivot Trend Accelerates
Galaxy is far from alone in this strategic shift. The high-performance computing trend among Bitcoin miners gained serious momentum after Core Scientific signed a landmark deal with cloud-computing firm CoreWeave, sending its stock price surging and triggering investor pressure on competitors to explore similar arrangements. Core Scientific shares surged more than 11% on November 7 alone after an earnings call highlighted progress on its AI infrastructure ambitions.
Other major players have followed suit. Hut 8 secured a $150 million investment driven by AI interest, while HIVE has been dedicating significant GPU resources to AI computation rather than pure Bitcoin mining. The message from investors is clear: companies that can successfully bridge the gap between crypto mining infrastructure and AI computing demand are being rewarded with higher valuations.
Despite the mining headwinds, Galaxy’s overall financial picture showed improvement. The firm narrowed its third-quarter net loss and reported operating revenue growth exceeding 30% from the previous quarter, suggesting that its diversified business model is providing resilience against the cyclicality of mining income.
Why This Matters
The convergence of Bitcoin mining infrastructure and AI computing represents one of the most significant structural shifts in the digital asset industry. As mining economics become increasingly challenging post-halving, the ability to repurpose power-intensive facilities for AI workloads could determine which companies survive and thrive. For the broader market, this trend signals that the companies powering both the cryptocurrency and AI revolutions may increasingly be one and the same — a development with far-reaching implications for energy markets, data center construction, and the long-term economics of blockchain security.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency markets are highly volatile, and readers should conduct their own research before making any investment decisions.
800 megawatts is massive. only 200 active right now and they want to flip all of it to AI. Novogratz saw the writing on the wall after that 23% revenue drop
Mining difficulty crossing 100 trillion for the first time on November 5 is the detail everyone should focus on. Smaller miners are getting squeezed out and pivoting to AI is the only way to survive for outfits with this kind of infrastructure.
core scientific, hut 8, hive, now galaxy. everyone with big power contracts is making the same move. the question is what happens to btc security when all this hashrate leaves
Galaxy shares up 7% on TSX. market clearly likes AI over mining right now. can not blame them tbh