Hyperscale Shuts Michigan Bitcoin Mining; Holdings Fall 79%

Hyperscale reported it turned off all Bitcoin miners at its Michigan campus on Wednesday after an inspection by an unnamed California-based neocloud provider that is the AI customer. The company plans to sell the mining rigs and convert the campus into an AI compute facility.

The AI customer has contracted for 20 megawatts of capacity under a 10-year master services agreement with two optional five-year extensions. If both extensions are exercised, the agreement could generate more than $1.2 billion over a 20-year term. An additional 32-megawatt option could raise potential revenue above $3 billion. The site is designed to support up to 340 megawatts.

Hyperscale is funding part of the conversion through sales from its Bitcoin treasury. On July 30 the company reported holding about 1,006 BTC and had previously sold 100 BTC while arranging a Bitcoin-backed credit facility for the Michigan campus. During the week ending Aug. 30, the company sold roughly 65 BTC for $5.1 million. A public Bitcoin treasury tracker now lists Hyperscale with about 215 BTC, valued at roughly $16.7 million, a 79% decline from the July figure.

The company cautioned the expansion plans are preliminary and depend on financing, regulatory approvals and the customer’s decisions about extensions and any additional capacity.

Hyperscale’s stock fell after the announcements and related filings. The shares closed at $0.1984 on Wednesday, down about 17% and at a split-adjusted record low after an intraday low of $0.1932. The company completed a one-for-five reverse stock split in late August and began trading on a split-adjusted basis on Aug. 25, according to its SEC filing.

The shutdown continues Hyperscale’s shift away from on-site cryptocurrency mining toward selling data center capacity and services. The company has used equipment sales, Bitcoin sales and a crypto-backed credit facility as part of its funding strategy for the Michigan redevelopment.