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Canaan Expects Its AI Business to Catch Up with Bitcoin Mining in Three Years

Canaan Creative, the world’s second-largest bitcoin mining machine manufacturer, is targeting to be a chip company instead of a bitcoin mining company. The company is attaching the same importance to AI chip business as bitcoin mining and aims to generate tens of millions of Chinese yuan in AI business this year, according to its founder Zhang Nangeng.

Zhang Nangeng, better known as NG Zhang, founder of the Avalonminer producer, said the company has renamed its mining machine department into high-efficiency computing department, and it will not be confined to bitcoin ecosystem. The company, inputting almost the same in AI as that into bitcoin mining, has become a company of dual business operation – AI and high-efficiency computing.

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Aim big on AI

Zhang disclosed that the company plans to focus more on AI business which is expected to catch up with its bitcoin mining business in three years. The company’s goal for this year is to make tens of millions of Chinese yuan in AI business.

“This is not difficult to achieve, as the (AI) market is huge.”

According to its financial figures, the crypto chipmaker sold more than 1.2 billion yuan in crypto chips with over 300 million yuan ($47Mn) in profits in 2017. As of the end of 2017, hashrate provided by Avalon miners accounts for 19.5% of the total network, ranking 2nd in the world. For the first 3 months in 2018, Canaan Inc sold a total of 101,143 sets of AvalonMiner.

“At present, the company’s chip business is dominated by crypto mining chips, but in the next two or three years, it is possible for AI chips to surpass mining chips which is not due to the decline in the need for mining machines but the great potential of AI market.” Zhang added that the company’s mining business is currently in stable growth.

Canaan launched its first AI chip Kendryte K210 last September after two years’ development which would go to mass production and enter market Q3 this year. According to Zhang, Canaan’s AI chip will mainly be applied to IoT (Internet of Things), intelligent entrance guard, etc.

Like its rival Bitmain, Canaan’s big move into AI field could provide the company with an excellent hedge against a decline in the cryptocurrency market as well as a potential blanket ban on crypto mining from local government who has been hostile towards the crypto sector.

Next IPO attempt, China or the U.S.?

When it comes to the company’s listing plan after its Hong Kong IPO failed, Zhang said “I don’t comment on IPO, and it is not allowed to comment on it, I think both are possible.” It is previously reported that the company is considering both China and the U.S. for a new application.

Canaan’s road to going public is full of twists and turns. In 2016, the company had tried to list on Shenzhen Stock Exchange through a back-door listing, but the plan was canceled after failing to meet the regulatory requirements.

In August 2017, Canaan submitted a listing application to the NEEQ (China’s National Equities Exchange and Quotation), once again it had to give up the listing for regulation issues after the country’s ICO ban issued later in September that year.

Despite the failure of the first two attempts in the domestic stock market, the company sought to go public in Hong Kong in May 2018, while it let its IPO application lapse six months later in November. And it is now plotting another IPO attempt, either in China’s Shanghai Stock Exchange or American stock exchange New York Stock Exchange and Nasdaq.

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