Public mining companies are increasingly transforming into AI providers, and quarterly reports clearly confirm this. The most telling case is IREN: in the fourth quarter of fiscal year 2026 (April–June), the company for the first time earned more revenue from cloud AI services than from Bitcoin mining. Revenue from AI Cloud totaled $70.5 million versus $66.7 million from mining. This is a landmark milestone that signals a fundamental shift in the business models of an entire industry.
The cost of transformation: losses and impairment
The transition was not painless. IREN recorded a net loss of $684 million, largely due to non-cash asset impairment of $450.4 million. The main reason is the write-down of mining equipment when repurposing facilities for AI Cloud needs. Total quarterly revenue amounted to $137.2 million, roughly 5% below the previous period. At the same time, revenue from the AI segment doubled (from $33.6 million), while proceeds from mining the first cryptocurrency plunged nearly 40%—from $111.2 million to $66.7 million.
Adjusted EBITDA fell by 68% to $19.2 million. The company attributes this to rising personnel costs and investments in the platform ahead of the anticipated AI Cloud scaling. The market reacted as expected: IREN shares went negative in premarket trading. Investors seem to be pricing in not current losses but the future potential of the AI segment, though for now this bet looks risky.
TeraWulf, Cipher, and Riot: different speeds of the same trend
TeraWulf reported revenue of $44.8 million in the second quarter, of which $31.9 million (about 71%) came from leasing capacity for high-performance computing (HPC). Revenue from digital assets fell to $12.8 million from $47.6 million a year earlier. However, even with such a tilt toward HPC, the company remains unprofitable: adjusted EBITDA went negative at $18.3 million, and net loss reached $939.9 million. The key factor is a non-cash revaluation of warrants at $755.7 million, which distorts the real picture of operating activity.
Cipher Digital is still lagging: in the second quarter, all revenue of $24.8 million came from mining, while the new Black Pearl data center infrastructure only began generating money in August. The company recorded a net loss of $267.5 million. Riot Platforms, by contrast, already reflects data center revenue, but it is still modest: $23.2 million out of total $174.2 million, with only $4.9 million being direct leasing—the rest is infrastructure preparation services.
My take on the situation
The pivot to AI is not just hype but a strategic necessity for miners facing declining margins after the halving. However, current reports show that monetizing AI capacity requires enormous capital expenditures and time. The market has yet to see a clear correlation between growing AI revenue and profitability—losses from impairment and revaluations remain the dominant theme. In the short term, shares of such companies will be volatile, but those that successfully complete the transformation could gain a significant competitive advantage in the long-term race for AI infrastructure.