Hyperscale Data has sold the majority of its Bitcoin holdings to help finance the expansion of its Michigan data center.

In an announcement on Friday, the Las Vegas-based company, formerly known as Ault Alliance, which trades on the NYSE American under the ticker GPUS, said it sold approximately 685 Bitcoin for about $43 million, an average of roughly $62,800 per coin. Hyperscale said it plans to use the proceeds primarily to continue developing and expanding the Michigan facility, adding that the sale also gives the company more flexibility to manage its debt, equity, and broader capital structure. According to the company, it has reduced its debt by approximately $30 million.

According to Hyperscale, the sale "is about capital allocation."

"We have built a substantial Bitcoin position, and today we have the ability to convert a portion of that highly liquid asset into capital that can accelerate the development of one of the most important assets in our portfolio," Executive Chairman Milton Ault said in a statement. "We believe that is the appropriate decision for Hyperscale Data and its stockholders at this point in the Company's evolution."

Hyperscale said it still holds 275 Bitcoin, down from approximately 960 BTC before the sale. According to Ault, the sale does not mark an end to the company's Bitcoin strategy, adding that Hyperscale plans to continue mining Bitcoin and may use mining output and available capital to rebuild its holdings over time, subject to market conditions.

"Bitcoin has been an important part of Hyperscale Data's strategy, and we expect it to remain an important part of our strategy going forward," he said.

AI Infrastructure Pivot

The Michigan facility is central to Hyperscale's shift toward AI infrastructure. Through its wholly owned Sentinum subsidiary, the company operates the data center, mines digital assets, and provides colocation and hosting services for AI companies and other businesses.

Demand for AI computing capacity has climbed steeply since the arrival of generative AI tools such as ChatGPT in late 2022, intensifying competition for data center space and the electricity to run it. The news comes as a growing number of Bitcoin miners redirect their power and data center infrastructure toward AI computing, a shift that has gathered pace since Bitcoin's April 2024 halving cut the number of new coins issued per block from 6.25 BTC to 3.125 BTC, lowering miners' block-subsidy revenue. Other companies selling Bitcoin to fund AI data centers include Singapore-based Bitdeer, which sold its entire Bitcoin treasury in February to support its AI data center expansion, and Florida-based MARA, which sold about $1.5 billion worth of Bitcoin in May to fund AI infrastructure and repurchase debt.

Those sales contrast with the broader corporate-treasury trend, in which companies such as Strategy, formerly MicroStrategy, have continued accumulating Bitcoin as a reserve asset.

"Sitting on a Gold Mine"

In March, VanEck's head of digital asset research, Matthew Sigel, said miners were "sitting on a gold mine" because they could repurpose existing sites for AI while trading at a steep discount to traditional data center companies.

"These miners were early to identify that they were sitting on a gold mine in terms of the cost of capital that they can earn by pivoting," he told CNBC earlier this year, noting that Bitcoin mining firms "still trade at a huge discount to other data center peers on a market cap to megawatt basis."