A Giant Company Transitioning from Bitcoin Mining to the Artificial Intelligence Sector is Experiencing Its Own Bull! Here are the Details

A new report prepared by the fintech and crypto research company Rittenhouse Research showed that Galaxy Digital's transition from Bitcoin mining to an artificial intelligence (AI) infrastructure is the main reason for the "strong buy" note on the company's shares.

Rittenhouse Research Says Galaxy Digital's Artificial Intelligence Pivot is the Biggest Bull Case, Not Bitcoin Mining

Galaxy Digital was once a significant player in Bitcoin (BTC) mining, but its purchase of the Helios data center from troubled miner Argo Blockchain in 2022 may have unexpectedly positioned the company as an important infrastructure provider in the emerging artificial intelligence economy.

During the purchase, this move was seen as a lifeline for a struggling crypto miner. However, the rapid rise of generative artificial intelligence platforms like ChatGPT has transformed the demand for high-performance data centers into a gold rush, and Galaxy seems to be sitting on one of the most valuable assets in this field.

In its latest investment note, Rittenhouse wrote, "Galaxy stumbled upon Helios by chance." The firm believes that the data center, now dedicated to serving artificial intelligence clients, could create $1.7 billion in EBITDA and a $32 billion equity value in the near term.

Due to the periodic interruptions and ongoing equipment upgrades in BTC mining, the crypto industry maintains its volatility, while artificial intelligence data centers typically offer stable, high-margin returns through triple net leases with large-scale cloud computing clients.

Rittenhouse argues that this contradiction in business models has turned Galaxy’s complete exit from mining into a strategic advantage.

Analysts wrote, "Galaxy has completely exited all Bitcoin mining activities to focus solely on artificial intelligence data center objectives, which sends a positive signal to potential hyper-scaling tenants."

Rittenhouse's report compares Galaxy's approach to that of other crypto miners like Riot Platforms and Cipher Mining, who are trying to reframe themselves as diversified data infrastructure providers.

However, the report argues that these companies did not have concrete artificial intelligence goals until the artificial intelligence boom began.