CEO Jihan Wu of Bitmain, one of the world's largest bitcoin mining equipment makers, says the company had booked $3.5B in revenues in 2017
the world's largest maker of cryptocurrency mining chips — and how they're pushing into new business areas https://www.bloomberg.com/... via @chafkin and @davidramli
Context & Ripple Effects
A year ago, Bitmain was a private Beijing firm profiled as controlling 29% of Bitcoin's hash rate while quietly entering the deep learning ASIC business [[a:921614]]; months later it took a $50M round from Sequoia and IDG Capital [[a:921956]]. Today's disclosure is the first hard number behind that run-up.
CEO Jihan Wu's $3.5B revenue figure lands right where analysts already were: Bernstein had estimated $3B-$4B in 2017 operating profit from selling miners and mining cryptocurrency itself [[a:927002]]. Read together, the two numbers imply the equipment business alone generated near-top-tier chipmaker margins — with self-mining income sitting outside the reported revenue line.
First-order effects
- Wu's confirmation makes Bitmain one of the most profitable chip companies of 2017 by Bernstein's math, and clarifies that its internal mining operations generate income beyond the $3.5B in equipment revenue.
- The disclosed cash flow funds the deep learning ASIC push flagged in the earlier profile, giving Wu capital to diversify away from bitcoin-cycle dependence.
Second-order effects
- Rivals like Canaan and MicroBT now compete against a vertically integrated player whose own mining operations cushion demand swings — pressuring them on rig pricing and forcing their own diversification.
- A mining rig vendor entering AI silicon with mining-scale capital changes the competitive math for incumbent deep-learning chip designers, who lack a comparably profitable captive cash machine.
Third-order effects
- If the pattern holds, crypto-mining windfalls keep converting into AI compute businesses — the same trajectory that later has Bitmain, Canaan, and MicroBT building US manufacturing footholds after American miners hit customs delays on Chinese-supplied rigs [[a:882506]].
- Concentration of both hash rate and mining-chip supply in one Beijing-based firm creates structural leverage over bitcoin's security and hardware costs alike — exposure that geopolitics, not competition, is most likely to test.
The trend: Cryptocurrency mining profits are being recycled into AI silicon and US-based manufacturing, turning ASIC vendors like Bitmain into diversified compute suppliers.