North American digital infrastructure and energy company Keel Infrastructure (KEEL.US) has officially announced a complete exit from its U.S. Bitcoin mining operations, shifting its strategic focus to Artificial Intelligence (AI) and High-Performance Computing (HPC) data centers. The company, formerly known as prominent miner Bitfarms (BITF.US), disclosed alongside its second-quarter earnings the details of its asset disposal, having sold 1,085 Bitcoin for approximately $75 million in cash, and has idled all its U.S. mining sites to pave the way for retrofitting.
This decision marks another major strategic pivot for the crypto mining industry, which is facing the dual pressures of rising costs and shrinking revenues. Keel Infrastructure CEO Ben Gagnon stated bluntly in the earnings release: "Power is the core constraint; everything else derives from that." The company is attempting to leverage its existing power infrastructure and industrial sites to capture the long-term windfall from the explosion in AI computing demand.
Financial Deterioration as the Core Driver of Transformation
According to Keel Infrastructure's second-quarter earnings report released on August 10, the company's financial condition deteriorated sharply over the past year, becoming the key catalyst for this strategic gamble. Data shows that Keel Infrastructure's revenue from continuing operations was just $30 million, a 50% plunge compared to the same period last year. The halving of revenue was primarily attributed to relatively weak Bitcoin prices and the company's closure of its mining facility in Moses Lake, Washington, in April.
The profitability picture was even more dramatically reversed. In the same period last year, Keel Infrastructure posted an operating profit of $11 million from continuing operations, but this quarter swung to an operating loss of $141 million, which included $84 million in non-cash depreciation expenses. Ultimately, the net loss attributable to continuing operations reached $64 million, or a loss of $0.11 per share, compared to a profit of $13 million in the prior-year period. Adjusted EBITDA also turned negative, coming in at a loss of $24 million.
To fund the transformation and alleviate cash flow pressure, Keel Infrastructure sold 1,085 Bitcoin through market operations between April 1 and August 7, generating cumulative cash inflows of approximately $75 million. Following the sale, its balance sheet still holds 1,861 Bitcoin as a reserve, with the unencumbered portion valued at approximately $121 million as of August 7.
The Path and Challenges from Mine to AI Computing Hub
Keel Infrastructure's transformation is not a simple downsizing but a complete portfolio restructuring. The company has decommissioned all its U.S. Bitcoin mining fleets to make room for the construction of HPC centers. CEO Ben Gagnon stated that the company began structuring its operations around the "power is core" philosophy 18 months ago, and its three highest-priority sites are now close to obtaining full permits, with each site in negotiations with potential tenants.
CFO Jonathan Mir emphasized that Keel Infrastructure "is in a better capital position today than at any point in the company's history." The liquidity he referred to includes approximately $698 million in unrestricted cash and the aforementioned Bitcoin position worth about $121 million. This substantial capital is backed by the company's successful completion of a $458 million convertible bond issuance in the second quarter.
However, this transformation path is not without obstacles. Industry analysts point out that retrofitting Bitcoin mines into AI computing centers requires significant capital investment and a high degree of technical expertise, posing a severe test to a company's execution capabilities. While AI hosting services can provide more stable and predictable long-term revenue compared to the highly volatile cryptocurrency market, the risks and costs of technological migration cannot be ignored. Keel Infrastructure's stock price fell over 11% on the day of the earnings release, closing at approximately $3.45, indicating that the market is still digesting the uncertainty brought by this major change.
