Canaan, the Singapore-based manufacturer of Bitcoin ASIC machines, is exiting the artificial intelligence chip market to concentrate on its core business in crypto infrastructure.

The company announced Monday that it has officially shut down its AI semiconductor unit and completed a pilot production run of mining rigs in the United States.

The move marks a shift in strategy for Canaan, which has struggled to gain traction outside of its mainstay Bitcoin mining business.

Canaan Refocuses Strategy on Bitcoin Mining, Ends Costly AI Semiconductor Unit

In a statement on Monday, Canaan confirmed that it is winding down its AI semiconductor division, citing misalignment with its long-term goals.

"I believe that doubling down on our core strengths in crypto infrastructure and Bitcoin mining is the most strategic path forward for Canaan," said Nangeng Zhang, the company's chairman and CEO.

The AI unit, which generated just $900,000 in revenue in 2024, represented a small fraction of the company's total income but accounted for 15% of operating expenses.

Canaan said the mismatch between cost and output, along with poor alignment with long-term goals, drove the decision to phase it out.

The firm had been exploring options for the unit since March 2022 and expects the wind-down to be completed in the coming months.

As part of its strategic reorientation, Canaan has launched its first U.S.-based production run, replicating its Malaysian operations.

Though it acknowledged that manufacturing in the U.S. comes with higher costs, the company sees the move as a long-term investment.

"This initiative is not just a hedge against tariffs but a potential strategic investment in long-term resilience," a Canaan representative said.

By producing closer to the North American market, Canaan hopes to reduce delivery times, adapt to customer demand more quickly, and better manage potential regulatory shifts.

The company added that imported mining equipment from Malaysia is currently subject to a 10% U.S. tariff, while costs for components and raw materials remain difficult to predict.

"We're actively working to optimize our U.S. cost structure with the goal of limiting production costs," the spokesperson said.

However, Canaan emphasized that any future scale-up in U.S. operations will depend on whether production becomes commercially viable. That includes a clearer tariff environment, sustainable demand, and manageable expenses.

Canaan also addressed potential concerns regarding national security, stating that all devices shipped to the U.S. are made in Malaysia and approved by local regulators.

If it expands U.S. manufacturing further, the company says it will comply with U.S. tech and security standards.

Canaan Doubles Down on U.S. Bitcoin Mining as Rivals Localize Amid Tariff Pressures

As Canaan exits the AI chip race, the company is ramping up its focus on U.S. Bitcoin mining, positioning itself to ride the momentum of the industry's shifting center of gravity.

Known for its Avalon series, Canaan has joined rivals Bitmain and MicroBT in expanding operations to the U.S., where over 38% of global Bitcoin mining now takes place.

The three firms collectively dominate the global mining rig market, controlling over 90%.

The move follows Donald Trump's 2024 election victory, which has sparked a renewed push for "American-made" mining gear.

Though Canaan's shares have tumbled 71% year-to-date, underperforming both crypto and mining indexes, some analysts view the company’s growing self-mining operations in the U.S. as a potential growth driver.

Meanwhile, the company is also targeting retail miners. In March, Canaan rolled out its new Avalon Q miner, a high-performance machine designed for home users, delivering up to 90 TH/s with adjustable power consumption.

This release brings professional-grade mining capabilities to retail users, compatible with standard 110V household outlets.

Financially, Canaan beat expectations in Q4 2024, reporting $88.8 million in revenue, up 80.9% year-over-year. Total 2024 revenue hit $269.3 million, a 27.4% increase from 2023.

With AI chips off the table and a focus on expanding U.S. presence and retail hardware, Canaan is repositioning for the next phase of Bitcoin mining, closer to home and potentially closer to profitability.

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