Cango looks past its bitcoin phase to a future as AI infrastructure operator

After booming for much the first year in its pivot to bitcoin mining, the company is looking ahead to a future of creating a ‘global, distributed AI compute grid’

Key Takeaways:

• Cango’s revenue jumped 60.6% sequentially in the third quarter to $224.6 million, buoyed by the addition of new mining capacity and rising bitcoin prices
• The company said it sees bitcoin mining as a “practical on-ramp” towards its eventual goal of building a global network of high-performance computing centers

By Doug Young

As it marks the one-year anniversary of its transformation from car trader to bitcoin miner, Cango Inc. (CANG.US) is learning that the virtual currency business isn’t for the faint of heart. The company reported strong financials for the third quarter through September, including a 60.6% quarter-on-quarter revenue gain for the latest period.

But all ears during the company’s earnings call were on the current quarter covering the final three months of the year, which have seen bitcoin drop sharply from its 2025 highs reached in early October. Speaking on the call after the release of its latest results on Monday, Cango executives assured analysts and investors they have plans in place to address the industry’s notorious volatility.

And perhaps more importantly, they also detailed a longer-term vision where the ups-and-downs of bitcoin may no longer matter for the company as it makes another transition from bitcoin miner to operator of high-performance computing centers for AI applications. Many believe such centers, often powered by on-site renewable power sources, will become critical infrastructure of the future to power a coming boom in AI-based applications requiring huge amounts of computing power and electricity.

Cango detailed its future roadmap as it symbolically released its latest quarterly results in U.S. dollars, ending its former use of the Chinese yuan. It also converted its New York listing to trade in the company’s ordinary shares, abandoning its former use of American depositary receipts (ADR) used by many Chinese companies, which is often criticized for less transparency.

Cango started out providing car-related services in China from its base in Shanghai, before abandoning that road due to persistent market weakness. It switched to bitcoin mining last November, and began discussing its latest ambitions to operate a global network of high-performance computing (HPC) centers with the release of its last quarterly report in September.

“We view bitcoin mining as the practical on-ramp toward our energy and compute ambitions, following the sequence of ‘from bitcoin mining to energy access, and from operational depth to AI compute deployment,’” said Paul Yu in the company’s latest earnings report.

That report showed refinements to Cango’s earlier plan first disclosed in September. The first phase of its refined roadmap already downplays the bitcoin mining business, and says Cango will focus on entering the GPU computing power leasing market over the near-term to serve compute platforms and AI startups. Over the medium-term, the company will turn its focus to setting up the necessary infrastructure for a regional AI computing network, including purchase and construction of data centers and accompanying power supplies.

The company has already begun experimenting with such infrastructure ownership and operation through its purchase of a data center in the U.S. state of Georgia in August. It disclosed it has also begun some related green energy pilot projects in Oman in the Middle East, and in Indonesia in Southeast Asia.

On the earnings call, Yu said that instead of building big data centers, Cango will focus on a more flexible strategy of “distributed compute units,” adding such an approach “will integrate dispersed GPU resources into standardized compute pools and break them into smaller units tailored to the needs of small and midsized enterprises.”

AI compute grid

Cango’s longer-term goal in its ongoing transformation is to create “a global, distributed AI compute grid powered by green energy, integrating multiple hubs and edge nodes for seamless, scalable capacity,” the company said. It added that its future network will seek to enter into multi-year contracts with clients “positioning Cango as a utility-like provider of AI compute for multinationals and large‑scale AI applications.”

While all that sounds exciting, the company’s latest results show how its current business in the bitcoin market is becoming increasingly tough. Since entering the business with 32 EH/s of capacity purchased in November last year, Cango has gone on to add an additional 18 EH/s of capacity in July, leading to a big jump in its monthly bitcoin output from that time.

The company’s monthly output had been dropping steadily in the first half of the year as it faced more competition for a fixed number of new bitcoins available. But then the figure jumped to 650.5 units in July, up 45% from the 450 units in June, as the new capacity came on stream. But output has been declining again since then, including the latest count of 602.6 units in October.

To compensate for the extra competition, which makes the cost of each bitcoin more expensive to mine, the company has been focused on improving its utilization rate through measures like tweaking its mining facility footprint, and upgrading older mining machines. Through such efforts, it has steadily raised its utilization rate to 46.09 EH/s in October from just 40.91 EH/s in July, meaning it’s now operating at more than 90% of its 50 EH/s of capacity.

Still, the rapid declines in bitcoin prices mean the cryptocurrency’s value is fast approaching the cost required to mine each unit. Excluding depreciation costs related to its mining machines, Cango spent an average of $81,072 to mine each of the 1,930.8 bitcoins it added in the third quarter, compared with the currency’s current price of about $87,000. Including amortization expenses, the average mining cost per coin exceeded the current bitcoin price. 

As its efficiency improved and bitcoin prices were still high, the company’s revenue rose sharply to $224.6 million in the third quarter from 1 billion yuan ($141 million) in the previous quarter. Its cost of revenue, including depreciation costs, was $198 million, giving the company $43.5 million in operating income and $80.1 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). On the bottom line, Cango also returned to the black with a $37.3 million profit for the quarter, reversing losses in the last two quarters.

The company’s stock soared after it announced its bitcoin pivot, and continued to climb as the cryptocurrency rallied. But in sync with the recent bitcoin downturn, the stock has dropped in the last two months, and is down about 30% this year. Rival miner Mara (MARA.US) looks similar, with its stock also down 31% this year. A better role model for Cango might be GDS (GDS.US), one of China’s leading independent data center operators, whose shares are up 47% this year on big investor hopes that it can become the type of high-performance computing center operator that Cango hopes to emulate.

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