A historic shift in the strategy of public miners is becoming increasingly evident. In the fourth quarter of fiscal year 2026, which ended June 30, IREN recorded for the first time that revenue from cloud AI services exceeded income from Bitcoin mining: $70.5 million versus $66.7 million, respectively. This is not just a quarterly fluctuation, but a marker of a fundamental transformation of the business model.
The transition to AI infrastructure was not easy. The company reported a net loss of $684 million, a significant portion of which—$450.4 million—is related to non-cash asset impairment. This involves the decommissioning of mining equipment amid the conversion of facilities for AI Cloud needs. Total quarterly revenue amounted to $137.2 million, approximately 5% lower than the previous period. At the same time, income from the AI cloud doubled from $33.6 million, while mining revenue fell by nearly 40%—from $111.2 million.
Adjusted EBITDA declined by 68%—from $59.5 million to $19.2 million. Management attributes this to rising personnel costs and investments in the platform ahead of the anticipated scaling of AI Cloud. The market reacted immediately: after the earnings release, IREN shares dropped in pre-market trading, reflecting investor nervousness about the timeline for recouping the strategic pivot.
The sector in a transition phase
TeraWulf shows similar dynamics, albeit with a different emphasis. In the second quarter, the company generated $44.8 million in revenue, of which $31.9 million (about 71%) came from leasing capacity for high-performance computing (HPC). Mining brought in only $12.8 million versus $47.6 million a year earlier. The Lake Mariner campus had 81 MW of revenue-generating critical IT capacity by the end of June, and after the launch of a new building on July 6, the figure rose to 102 MW. However, this has not yet ensured profitability: adjusted EBITDA turned negative at $18.3 million, and the net loss reached $939.9 million due to a non-cash revaluation of warrants totaling $755.7 million.
Cipher Digital is at an earlier stage: in the second quarter, all $24.8 million in revenue came from mining, and the new Black Pearl data centers only began being handed over to the customer in August. The company's loss amounted to $267.5 million. Riot Platforms already reports data center revenue of $23.2 million, but it still lags behind the $113.7 million from Bitcoin mining; engineering services added another $37.3 million.
My analysis: The trend is obvious—miners are turning into AI infrastructure operators, but the cost of this transition is high. Investors should be prepared for volatility: asset impairments and warrant revaluations will weigh on financial results in the coming quarters. The key question is whether companies can convert energy capacity into stable AI cash flow before the market loses patience.