Bitmain, the World Leader in Cryptocurrency Mining Hardware, wants to expand its reach to artificial intelligence (AI).
Bitmain is the undisputed world leader when it comes to cryptocurrency mining hardware. According to Bernstein Research, Bitmain made between $3 to $4 Billion in profits in 2017, controlling 80% of the crypto-mining market. It may come as a surprise therefore that they are pivoting towards AI.
The Bitmain CEO Jihan Wu told Bloomberg that the company wanted to channel expertise towards developing application-specific integrated circuit (ASIC) chips for the AI market.
ASIC chips, which are used in the company’s powerful cryptocurrency miners are also used in machine learning. Therefore, the company could stand to benefit largely from this emerging field.
It is also seen by many as an excellent “hedged bet” against a hostile Chinese government. China has banned cryptocurrency trading and foreign exchanges; however, they remain quiet on cryptocurrency mining.
Wu said, “As a [Chinese] company, we have to be prepared.”
Bitmain has already released several products in the AI space under the name Sophon. However, what is new is the undeniable pivot further towards AI, including releasing two more chip generations in the coming months. On top of this, they believe that in five years as much as 40% of Bitmain’s revenue could come from AI sales.
That seems ambitious as the $4 billion profit they made last year will likely rise as the popularity of cryptocurrency mining increases. They will also have to compete with market leader Google, who currently dominates the AI space. One piece of good fortune for Bitmain is the fact that the Chinese government has effectively banned the use of Google’s chips. This is a relatively large market Bitmain could control.
Overall, this move towards AI could become lucrative for Bitmain, especially in China. It is clever to hedge against the unknown probability of China banning crypto mining. They would, however, be remiss to let go of their huge market dominance in the crypto mining space. One thing’s for sure it’ll take a strong company to ever knock them off that perch.