Bitmain Reportedly Receives Funding Round of $400 Million
Powerhouse crypto-mining manufacturer Bitmain Technologies Ltd. has reportedly received a fresh funding round of $400 million USD from Sequoia Capital China. The company is also said to be planning an initial public offering for later this year.
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With Fresh Capital, Bitmain Planning Initial Public Offering
Citing Chinese local media, the China Money Network reported Sequoia Capital China, an affiliate of the famous Silicon Valley venture fund, led the round. The new capital injection values the company at $12 billion USD. Additionally, the report claimed Bitmain is planning an initial public offering in Hong Kong in September, where it foresees having a market capitalization of $30 to $40 million. Bitmain has not publicly confirmed the reports.
Bitmain is one of the world’s largest producers of application-specific integrated circuits, or ASICs, which are used to secure cryptocurrencies like Bitcoin via the mining process. Bitmain currently controls around 80 percent of the crypto-mining equipment market and founder Jihan Wu said publicly in May that the firm had revenue of $2.5 billion in 2017. Reports of a IPO by the company have been circulating in recent weeks.
Bitmain has faced increased competition in the last year from new firms who are also producing ASICs for crypto-mining, such as Canaan, Halong and Samsung. Last month, Canaan Inc., which is also based in China, filed an application to become listed on the Hong Kong stock exchange. The firm is looking to raise around $1 billion and plans to be trading in July.
Bitmain Pivoting to Artificial Intelligence Chips
Bitmain founder Wu recently told Bloomberg that funds raised during an IPO would be used to expand to other industries, such as artificial intelligence. Like proof-of-work cryptocurrency networks, AI systems require large amounts of computations. To that end, Bitmain is working on new chips that are designed specifically for crunching data in AI systems. It is moving into a increasing crowded field, as chip producer NVIDIA recently announced that it is creating ASICs for artificial intelligence applications, while Google released a beta version of an ASIC back in February that works with its TensorFlow machine learning framework.
The Chinese government strongly supports the development of AI in China, which it uses to surveil and track its citizens, among other applications. The most valuable AI start-up in China is SenseTime, which provides law enforcement services with facial recognition and tracking services. In April, it received a $600 million funding round, making it valued at around $4.5 billion USD, per the Wall Street Journal. The reported Bitmain round is in the same ballpark, lending credence to the new report by the China Money Network.
What’s your take? Is the mining company going from powerhouse to global super power? What’s that mean for crypto? Sound off in the comments below.
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