In a decisive move signaling a return to its core strengths, Canaan Inc. — the world’s first publicly listed blockchain company — has announced the termination of its artificial intelligence (AI) semiconductor business. Founded in 2013 and listed on Nasdaq in 2019, Canaan has long been a leader in cryptocurrency mining hardware, particularly ASIC-based Bitcoin miners. Now, after years of pursuing a dual-track “blockchain + AI” strategy, the company is streamlining operations by exiting non-core AI chip development to focus exclusively on Bitcoin mining equipment, self-operated mining, and consumer-grade mining products.
This strategic pivot reflects both market realities and external pressures, including prolonged crypto market downturns and intensifying geopolitical trade dynamics.
The Rise and Retreat of Canaan’s AI Chip Division
Canaan’s venture into AI semiconductors was once seen as a bold step toward diversification. Starting in 2016, the company invested heavily in RISC-V-based edge AI chips under its Kendryte brand, aiming to capture opportunities in the fast-growing AIoT (Artificial Intelligence of Things) sector.
2018: Launch of the Kendryte K210
The K210 marked a milestone as the world’s first commercial RISC-V edge AI chip. With a power consumption of just 0.3W and delivering 1 TOPS of compute performance, it featured an in-house neural network accelerator (KPU) capable of real-time facial recognition and sound source localization. Its highly integrated SoC design enabled dual audio-visual processing — a breakthrough for smart sensors and embedded AI devices.
2021: Introduction of the K510
Building on early success, Canaan released the K510 with doubled performance at 2 TOPS and added an Image Signal Processor (ISP), enabling multi-stream video analysis. This opened doors to industrial automation, smart city infrastructure, and energy monitoring systems using CNN-based anomaly detection algorithms.
2022: Release of the High-Performance K230
Targeting advanced applications like robotics and driver assistance systems, the K230 adopted a heterogeneous multi-core architecture with two Xuantie C908 RISC-V cores and a third-generation KPU. It achieved over 70% MAC utilization on common AI models, supported full HD stereo vision, and handled 4K video input — positioning it competitively in high-end edge computing.
Despite technical achievements, the business failed to gain commercial traction. According to Canaan’s 2024 financial report, revenue from its edge computing ASIC products totaled only around $900,000 annually — a negligible portion of overall income — while accounting for 15% of total operating expenses. Since initiating strategic review in March 2022, the company explored asset sales and partnerships but ultimately decided to discontinue the line entirely.
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Financial Rationale Behind the Exit
Management stated that terminating the AI chip division will significantly reduce operational costs. This aligns with data from Q4 2024, where total operating expenses reached $49.3 million — more than half of which were administrative costs.
By reallocating engineering talent and capital toward core mining operations, Canaan aims to improve capital efficiency, strengthen margins, and accelerate innovation in its primary market: Bitcoin mining hardware.
As CEO Zhang Nangeng noted in the official announcement:
“This restructuring allows us to concentrate resources on areas where we have deep expertise and sustainable competitive advantages. Our goal is long-term, profitable growth.”
Bitcoin Mining Business Shows Signs of Recovery
While stepping back from AI, Canaan’s core mining business is showing strong momentum.
In Q4 2024, total revenue saw significant sequential growth, driven by rising Bitcoin prices and restored operations at its Kazakhstan mining facilities. By May 2025, monthly Bitcoin production surged 25% month-over-month to 109 BTC — a new all-time high. Operational hash rate hit 7.27 EH/s, with installed capacity reaching 8.75 EH/s, both record levels.
Notably, Canaan is expanding its footprint beyond Asia. Its North American mining operations are scaling rapidly, reflecting broader industry trends toward geographic diversification.
Global Supply Chain Restructuring Amid Geopolitical Tensions
The U.S.-China trade conflict has reshaped the global mining hardware landscape. Following tariffs imposed under the Trump administration — later extended under subsequent policies — Chinese manufacturers faced increasing barriers to exporting mining rigs to the U.S., one of the largest markets.
In response, the “Big Three” Chinese mining hardware makers — Canaan, Bitmain, and MicroBT — have initiated localized production in North America:
- MicroBT began U.S. localization efforts in 2022.
- Bitmain launched domestic manufacturing in December 2024.
- Canaan initiated pilot production in April 2025 after new tariff rules took effect.
This emerging model — “designed in China, manufactured in North America” — allows companies to bypass import restrictions while maintaining technological control. Analysts project that by 2028, this relocated supply chain could support a $12 billion upstream mining hardware ecosystem.
However, challenges remain. U.S. policymakers continue to raise concerns over energy usage and national security implications of large-scale crypto mining, prompting lobbying efforts from domestic competitors seeking regulatory limits on foreign-owned operations.
Competitive Landscape and Industry Outlook
The global Bitcoin miner market remains dominated by three key players:
| Player | Product Line | Market Position |
|---|---|---|
| Bitmain | Antminer | Market leader with broad distribution |
| Canaan | AvalonMiner | Strong second-tier presence |
| MicroBT | Whatsminer | Aggressive expansion in North America |
With Canaan now fully focused on mining technology and operations, competition is likely to intensify — especially in efficiency improvements, thermal design, and yield optimization of next-gen ASICs.
Yet risks persist. Short-term impacts include workforce adjustments within former AI teams and disruptions to existing AI-related partnerships. Additionally, short-seller firm White Diamond previously criticized Canaan’s relatively low miner profit margins compared to rivals and questioned its valuation amid lingering doubts about sustainability.
Still, Canaan’s move mirrors broader industry consolidation trends. As crypto markets mature and regulatory scrutiny increases, leaner, more focused companies are better positioned to survive volatility cycles.
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Frequently Asked Questions (FAQ)
Q: Why did Canaan discontinue its AI chip business?
A: Despite technological innovation, the AI semiconductor segment generated minimal revenue ($900K in 2024) while consuming 15% of operating costs. Exiting allows Canaan to cut expenses and refocus on its profitable core: Bitcoin mining hardware.
Q: Will Canaan continue selling existing AI chips like the K210 or K230?
A: While current inventory may still be available through distributors, official support and future development for these chips have been discontinued as part of the strategic exit.
Q: Is Canaan still involved in R&D for new mining hardware?
A: Yes. The company continues investing heavily in next-generation AvalonMiner ASICs, aiming for higher efficiency and lower power consumption per terahash.
Q: How does geopolitical tension affect Canaan’s operations?
A: Trade policies, especially U.S. tariffs on Chinese tech products, prompted Canaan to begin pilot manufacturing in North America to maintain market access and reduce dependency on cross-border supply chains.
Q: What does this mean for Canaan’s long-term future?
A: By concentrating on its proven strengths in ASIC design and mining operations, Canaan aims to become more agile, efficient, and resilient against market cycles and external shocks.
Q: Where can I track Canaan’s mining output and performance metrics?
A: Official updates are published via investor relations channels. Real-time network data can also be monitored through blockchain analytics platforms.
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Conclusion
Canaan’s decision to exit the AI semiconductor space marks the end of an ambitious but underperforming chapter. By refocusing on Bitcoin mining — from hardware design to self-mining operations — the company is doubling down on what it knows best.
Amid evolving global trade dynamics and shifting crypto market conditions, strategic clarity may prove more valuable than diversification. As the industry moves toward greater maturity and regulation, firms like Canaan that streamline operations and adapt quickly stand the best chance of long-term survival — and success.
Core Keywords: Canaan Inc., Bitcoin mining, ASIC chips, Kendryte, AvalonMiner, RISC-V, edge computing, crypto hardware