Cango pivots from Bitcoin mining to AI infrastructure
Chinese company Cango, previously known as one of the largest Bitcoin miners in the country, has announced the raising of $75.5 million in a new funding round. The obtained funds will be used to reorient the business from mining to the development of artificial intelligence (AI) solutions.
This strategic decision is driven by the overall decline in the profitability of Bitcoin mining amid the volatility of the cryptocurrency market. Additionally, the Chinese government has tightened regulation of the sector, forcing many major players to seek alternative directions for business development.
Cango's investment round was led by one of the company's key shareholders - Dajia Insurance Group. As a result of the deal, Dajia's stake in Cango has increased to nearly 50%, which will allow the insurer to exert more significant influence on strategic decision-making.
According to Cango's management, the raised funds will be used to create computing power for AI-based solutions, as well as to develop relevant software products. The company sees this direction as promising and capable of compensating for the losses from the scaling down of mining activities.