Canaan Inc. Announces Strategic Realignment

Rhea-AI Summary

Canaan Inc. (NASDAQ: CAN) announced a strategic realignment to focus on its core crypto-related businesses while discontinuing its non-core AI semiconductor business unit. The company will concentrate on bitcoin mining machine sales, self-mining operations, and consumer mining products. The AI semiconductor unit, which generated only $0.9 million in revenue during FY2024 and accounted for 15% of total operating expenses, will be wound down in the coming months. The company has been exploring strategic options for this unit since March 2022, including potential asset sales. CEO Nangeng Zhang emphasized that this move will enable Canaan to concentrate resources on areas of competitive advantage, drive sustainable growth, and strengthen its position in the global crypto ecosystem. The realignment is expected to significantly reduce operating expenses and enhance capital efficiency.

Positive

• Significant reduction in operating expenses expected after discontinuing AI unit that represented 15% of total operating expenses
• Strategic focus on core competencies in crypto mining and infrastructure
• Enhanced capital efficiency through resource reallocation to primary business lines
• Streamlined operations expected to drive sustainable growth and innovation in crypto-related businesses

Negative

• Loss of potential diversification opportunity in AI semiconductor market
• Minimal revenue contribution from AI unit ($0.9M in FY2024) indicates unsuccessful business expansion attempt
• Potential write-offs or costs associated with discontinuing the AI semiconductor business unit
• Time and resources invested in AI unit since at least March 2022 yielded poor returns

Insights

Financial Analyst

Canaan's exit from low-revenue AI chip business will significantly reduce costs while strengthening focus on core crypto operations.

Canaan's decision to discontinue its AI semiconductor business represents a textbook case of strategic resource reallocation. The financial logic is compelling - the AI unit generated just $0.9 million in revenue during 2024 while consuming approximately 15% of the company's total operating expenses. This severe imbalance between revenue contribution and cost burden creates a clear opportunity to improve profitability metrics.

The market typically rewards such decisive portfolio pruning, particularly when companies demonstrate discipline in exiting underperforming segments. What's especially notable is the methodical approach management has taken, beginning exploration of strategic options as early as March 2022. This suggests a deliberate decision-making process rather than a reactive cost-cutting measure.

By reallocating resources to bitcoin mining machine sales, self-mining operations, and consumer mining products, Canaan is doubling down on its established expertise and competitive advantages. The expected significant reduction in operating expenses should improve free cash flow and strengthen the company's financial flexibility during a period of continued volatility in cryptocurrency markets.

This move aligns with broader industry trends where technology hardware companies are increasingly focusing on their core competencies rather than maintaining marginally related business lines. For Canaan specifically, the ability to concentrate R&D and operational resources on next-generation mining hardware could potentially strengthen its competitive positioning in the crypto infrastructure market.

Company to discontinue its non-core AI semiconductor business to sharpen focus on crypto-related businesses

SINGAPORE, June 23, 2025 /PRNewswire/ -- Canaan Inc. (NASDAQ: CAN) ("Canaan" or the "Company"), an innovator in crypto mining, today announced that it has commenced a strategic realignment aimed at sharpening its focus on its core businesses of bitcoin mining machine sales, self-mining operations, and consumer mining products. As part of this initiative, the Company will discontinue its non-core AI semiconductor business unit, described in the annual report for the year ended December 31, 2024 as "ASICs for edge computing applications", with the process expected to conclude in the coming months.

This decision reflects the Company's commitment to streamlining operations, enhancing capital efficiency, and reducing expenditures unrelated to its primary business lines. By discontinuing the AI semiconductor business unit, Canaan will reallocate resources and leadership attention toward its foundational strengths in the rapidly evolving digital asset ecosystem. While the AI semiconductor business unit brought promising innovations, it did not align with the Company's streamlined growth strategy.

In fiscal year 2024, the Company's revenue from the sale of edge computing products was approximately US$0.9 million. Unaudited operating expenses related to this business accounted for around 15% of the Company's total operating expenses for fiscal year 2024.

Beginning as early as March 2022, the Company has engaged external advisors, sought independent third-party valuation, and actively explored its strategic options for its AI semiconductor business, including partial or complete asset sales or orderly wind-downs of related operations. After the AI semiconductor business unit is fully discontinued, the Company expects its operating expenses to decline significantly.

"As we navigate a dynamic and rapidly evolving market environment, I believe that doubling down on our core strengths in crypto infrastructure and bitcoin mining is the most strategic path forward for Canaan," said Nangeng Zhang, chairman and chief executive officer of Canaan Inc. "By focusing our resources and talent on the areas where we have deep expertise and competitive advantage, we aim to drive sustainable growth, unlock long-term shareholder value, and continue playing a central role in the global crypto ecosystem. This realignment will not only enable us to accelerate innovation in our next-generation mining hardware and infrastructure solutions, but also will strengthen our ability to serve customers worldwide and reinforce our leadership in a critical and foundational layer of the digital asset economy."

The Company remains committed to delivering cutting-edge ASIC solutions for crypto infrastructure, expanding its mining footprint, and strengthening its position in the global cryptocurrency infrastructure market.

About Canaan Inc.

Established in 2013, Canaan Inc. (NASDAQ: CAN), is a technology company focusing on ASIC high-performance computing chip design, chip research and development, computing equipment production, and software services. Canaan has extensive experience in chip design and streamlined production in the ASIC field. In 2013, Canaan's founding team shipped to its customers the world's first batch of mining machines incorporating ASIC technology in bitcoin's history under the brand name Avalon. In 2019, Canaan completed its initial public offering on the Nasdaq Global Market. To learn more about Canaan, please visit https://www.canaan.io/.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Canaan Inc.'s strategic and operational plans, contain forward-looking statements. Canaan Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20-F and 6-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Canaan Inc.'s beliefs and expectations, such as expectations with regard to revenue or mining hash rate deployment, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goals and strategies; the Company's future business development, the ability of the company to execute against its goals, financial condition and results of operations; the expected growth of the bitcoin industry and the price of bitcoin; the Company's expectations regarding demand for and market acceptance of its products, especially its bitcoin mining machines; the Company's expectations regarding maintaining and strengthening its relationships with production partners and customers; the Company's investment plans and strategies, fluctuations in the Company's quarterly operating results; competition in its industry; changing macroeconomic and geopolitical conditions, including evolving international trade policies and the implementation of increased tariffs, import restrictions, and retaliatory trade actions; and relevant government policies and regulations relating to the Company and cryptocurrency. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Canaan Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

Canaan Inc.
Xi Zhang
Email: IR@canaan-creative.com

ICR, LLC.
Robin Yang
Tel: +1 (347) 396-3281
Email: canaan.ir@icrinc.com

 

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SOURCE Canaan Inc.

FAQ

Why is Canaan (CAN) discontinuing its AI semiconductor business?

Canaan is discontinuing its AI semiconductor business to focus on its core crypto-related businesses, reduce operating expenses, and enhance capital efficiency. The AI unit generated only $0.9M in revenue while accounting for 15% of operating expenses in FY2024.

What are Canaan's (CAN) main business segments after the realignment?

After the realignment, Canaan will focus on three core businesses: bitcoin mining machine sales, self-mining operations, and consumer mining products.

How much will Canaan (CAN) save by discontinuing the AI semiconductor unit?

The discontinuation will eliminate approximately 15% of Canaan's total operating expenses, which was the portion attributed to the AI semiconductor business unit in FY2024.

When will Canaan (CAN) complete the discontinuation of its AI semiconductor business?

The company expects to conclude the discontinuation process of its AI semiconductor business unit in the coming months from June 2023.

What strategic options did Canaan (CAN) explore for its AI semiconductor business?

Since March 2022, Canaan explored various strategic options including partial or complete asset sales and orderly wind-downs of operations, working with external advisors and seeking independent third-party valuation.