Galaxy to End Hosting for Argo’s Bitcoin Miners as It Shifts Focus to HPC Hosting

Galaxy Digital is set to end the colocation contract for 2.3 EH/s of Argo Blockchain’s Bitcoin miners as it explores transitioning its Bitcoin mining segment into high-performance computing (HPC) hosting.

In its third-quarter earnings release, Galaxy announced it had recently signed a non-binding term sheet with a U.S.-based hyperscaler for HPC colocation at its Helios facility in West Texas, which is currently utilized for Bitcoin mining.

“The term sheet includes options to allocate all of Helios’ 800 megawatts of currently approved power capacity to HPC hosting and support. The consummation of this transaction is subject to the execution of definitive documents, customary due diligence, and the parties’ approvals,” Galaxy stated in the release.

This move positions Galaxy as the latest operator of Bitcoin mining infrastructure considering an AI pivot amid the network’s low mining revenue following the halving. Galaxy’s proprietary Bitcoin production decreased from 373 BTC in Q1 to 242 BTC and 176 BTC in Q2 and Q3, respectively.

As of September 30, Galaxy managed 6.2 EH/s of hashrate, primarily powered by 200 megawatts of operating capacity at the Helios site, according to its quarterly filing. This includes Galaxy’s proprietary equipment and the 23,000 S19j Pro Bitcoin miners hosted by Argo.

In a release on Thursday, Argo mentioned receiving a notice from Galaxy, despite ongoing discussions, stating that Galaxy would not renew the hosting contract beyond the current expiration date of December 28 due to its HPC pivot plan. Argo indicated it is assessing the future of the S19j Pros, which, at the current hashprice environment, generate a revenue of about $65/mWh. The miners currently hosted in Texas make up a majority of Argo’s total hashing capacity.

While Argo still owns and operates a proprietary facility in Baie-Comeau, Quebec, it proposed on Thursday a plan to expand the infrastructure’s capacity also for potential HPC hosting, rather than for those soon-to-be-idle Bitcoin miners.

“The HPC expansion will require the company to incur capital expenditures at its Baie-Comeau site, which is expected to be met through additional financing, certain aspects of which may be subject to shareholder approval,” Argo stated in the release.