GPUS Stock Slips After Hyperscale Data Carves Out Bitcoin Mining Business Into New Unit

• Hyperscale Data plans to separate Bitcoin mining operations into a newly formed subsidiary, Patriot BTC.
• The company said on Tuesday that the split will clarify the valuation of mining and AI businesses.
• Michigan AI data center could generate over $3 billion if it meets customer expansion targets.

Shares of Hyperscale Data (GPUS) slipped in morning trade on Tuesday, even as Bitcoin (BTC) rallied after company announced that it planned to separate its Bitcoin mining business from AI.

Hyperscale Data announced that it was taking steps to form Patriot BTC, a new subsidiary to hold its mining operations. The company intended to move its Montana data center, Bitcoin miners, and mining equipment into the new unit, and explained that the split was meant to separate its Bitcoin mining from its Michigan AI data center strategy. Each business had different needs, and the move ought to give investors a clearer view of both, the company said.

GPUS stock fell more than 5% in morning trading. On Stocktwits, retail sentiment around GPUS moved from the ‘bullish’ to ‘neutral’ zone, while chatter around it stayed at ‘low’ levels over the past day.

Bitcoin, meanwhile, hit an eight-month high trading around $86,303 at the time of writing. Hyperscale Data holds about 215 Bitcoin, according to data from BitcoinTreasuries.net.

Mining And AI Go Separate Ways

Executive Chairman Milton Ault III said in the release that Bitcoin mining "can be viable as a focused, single-purpose business." But according to him, mining and AI data centers have different capital requirements and priorities. 

The separation would keep the company focused on positioning the Michigan facility for a potential sale, a public-company transaction, or internally funded development, he said. Management may recommend placing Patriot BTC inside a publicly traded entity, the company also noted. 

Michigan Facility Nears Its First Customer

The announcement came days after Hyperscale said last week it had invested more than $70 million in the facility. It expects operations under an agreement with a California-based neocloud provider to begin in November.

Hyperscale said that agreement could generate more than $1.2 billion if it runs the full 20 years. If the customer expands to 52 megawatts (MW), the company said, revenue could top $3 billion.

GPUs stock has been down nearly 80% so far this year and down over 92% in the last 12 months.

Read also: Ethereum Hits 7-Month High, Marks First Close Above $2,750 Since Late January

For updates and corrections, email newsroom[at]stocktwits[dot]com.