Keel Infrastructure Sells Entire Bitcoin Treasury for $192 Million, Shifts Focus to AI

Keel Infrastructure has announced the sale of its entire bitcoin treasury, liquidating 2,520 bitcoin for a total of $192 million. This move leaves the company with only nominal bitcoin holdings as of September 30, 2023. The sales included the 2,261 bitcoin that Keel held at the beginning of the quarter and the 259 bitcoin it mined during that period.

The company stated that it strategically timed these sales during favorable market conditions. Going forward, Keel plans to sell any bitcoin mined from its remaining operations in Quebec on a daily basis, effectively eliminating its exposure to Bitcoin price fluctuations related to treasury holdings.

This decision marks a significant shift for Keel, which rebranded from Bitfarms earlier this year and has pivoted away from U.S. bitcoin mining to focus on high-performance computing (HPC) and AI infrastructure. Following the cessation of U.S. mining operations, Keel's revenue from continuing operations fell to $28 million, down from $68 million the previous year. The company's adjusted EBITDA also turned negative, dropping to -$27 million from a positive $19 million.

Despite these challenges, Keel reported approximately $780 million in unrestricted cash as of November 4, 2023, and indicated no immediate need for debt or equity financing. CEO Ben Gagnon highlighted the increasing demand for power and the company's advanced plans for securing power supply through 2027 and 2028.

Construction has begun at the Moses Lake site, which is expected to be the first energized location generating HPC revenue by 2027. Additionally, permitting is progressing for other sites in Pennsylvania, with potential expansions that could significantly increase data center capacity.

Keel's strategy reflects a broader trend in the industry, where other public miners like Riot Platforms and Hut 8 have also sold substantial amounts of bitcoin to fund AI initiatives. As the company consolidates its mining operations into a single AI campus, it aims to lease its development pipeline of approximately 2.2 gigawatts across various states.