Bitcoin miner scraps Michigan site for AI deal worth up to $1.2 billion
Against the backdrop of a sector-wide renegotiation of what data center power is worth, Hyperscale Data shut down $BTC mining operations at its Michigan facility on Tuesday to clear capacity for an AI customer. The company said…
Key takeaways
- Hyperscale Data shut down Bitcoin mining at its Michigan facility on Tuesday to free up 20 megawatts of capacity for an unnamed California-based cloud computing provider.
- The AI deal could generate more than $1.2 billion if the customer exercises both five-year extensions to the initial 10-year term.
- The customer can add 32 megawatts within the first two years, which combined with both extensions could push total contract revenue above $3 billion.
- Hyperscale plans to sell its mining servers and expects to record gains on those sales, but did not announce a start date for AI operations at the Michigan site.
- CEO William Horne said Hyperscale's market cap trades at a significant discount to other data center companies, which he expects to narrow as contracted power capacity becomes clearer to investors.
Against the backdrop of a sector-wide renegotiation of what data center power is worth, Hyperscale Data shut down $BTC mining operations at its Michigan facility on Tuesday to clear capacity for an AI customer. The company said the agreement covers 20 megawatts of capacity for an unnamed California-based cloud computing provider, and could generate more than $1.2 billion if the customer exercises both five-year extensions to the initial 10-year term.
CEO William Horne framed the move in terms of capital reallocation: the immediate shutdown, he said, allows the team to redirect the facility's power and infrastructure toward preparing for AI operations. Hyperscale plans to sell the mining servers and expects to record gains on those sales. The company did not announce a start date for AI operations at the Michigan site.
The optionality embedded in the deal is substantial. The agreement gives the customer the right to add 32 megawatts within the first two years. Horne said exercising that option and both five-year extensions could push total contract revenue above $3 billion, though both figures carry the conditional weight of unexercised options.
The capex cycle in practice
Horne addressed the valuation gap directly, noting that Hyperscale's market capitalization currently trades at what he called a significant discount to other data center companies. His stated expectation is that the discount narrows as contracted power capacity comes into sharper focus for investors. That framing is familiar across the miner-to-AI conversion wave: operators who held power contracts and built-out infrastructure are pitching the market on an asset reclassification story.
VanEck's head of digital asset research, Matthew Sigel, argued in March that miners are sitting on a gold mine and could profit by repurposing their infrastructure as AI compute demand grows. The sector-wide read-through has real precedent. IREN's quarterly results last month showed AI cloud revenue exceeding Bitcoin mining revenue for the first time. But IREN also wrote down $450.4 million in asset values, the bulk tied to mining equipment it had retired, a figure that puts a number on the conversion cost sitting inside any such transition.
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