Bitmain, mired in controversy, has found its strongest backing in the United States

Original Author: Ryan Weeks, Bloomberg
Original Translation: Luffy, Foresight News

Once regarded by the United States as a national security threat and embroiled in controversies over mining machine safety and remote control, Bitmain is the absolute leader in the global Bitcoin mining machine industry. This mysterious Chinese company unexpectedly formed a significant business alliance with Eric Trump, the second son of Donald Trump, after facing a White House ban and an investigation by the Department of Homeland Security.

On one side is a Chinese mining giant questioned for jeopardizing the safety of the power grid and military bases, and on the other is a Bitcoin company under the Trump family. Together, they built a super mining facility in Texas, initiating a heavyweight collaboration. This article restores the intertwined alliance of politics and cryptocurrency, revealing how Bitmain turned the tide from being on the U.S. "blacklist" to becoming one of the Trump family's most critical business partners. The following is the full translation:

Mining Machine Empire: The Mysterious and Monopolistic Bitmain

From dedicated data centers in rural Texas to transformed lumber mills in Borneo, rows of shoebox-shaped machines stand tall, emitting deafening roars that sometimes even draw complaints from neighbors. Each machine contains hundreds of Application-Specific Integrated Circuits (ASICs), produced at high costs by advanced factories in Taiwan. These chips are soldered onto three enclosed computing boards, performing brute-force calculations, with all instructions issued by a control board. Depending on the specific model, the machines use built-in fans or liquid cooling systems to prevent components from overheating, consuming massive amounts of electricity regardless of where they are installed.

These devices have only one purpose: to crack the underlying algorithm of Bitcoin, SHA-256. SHA-256 is a so-called one-way function, meaning the only way to solve the mathematical puzzle it generates is through trial and error. Bitcoin miners rely on this; once the calculation is correct, they have the right to verify others' transactions and receive Bitcoin rewards.

Therefore, their profits directly depend on how many calculations these devices, known as "Antminers," can attempt per second: currently in the trillions per second. A top-of-the-line Antminer can cost as much as $17,400. Large mining companies can own up to 500,000 mining machines, with initial investments reaching billions of dollars, but this capital expenditure is negligible compared to potential returns, at least when cryptocurrency prices are high. Some users liken it to owning a printer that prints lottery tickets, but with a much higher probability of winning.

Antminers are the flagship products of Bitmain Technologies Ltd. The company not only dominates the Bitcoin mining machine production industry but has, for most of its development history, essentially been the industry itself, with a market share exceeding 80%. Few companies have achieved such absolute control in a global industry: Alphabet Inc. in the search domain is one; going back decades, perhaps De Beers, which at its peak accounted for over three-quarters of global diamond production; or even institutions like the Dutch East India Company that monopolized long-distance spice trade centuries ago. But unlike these historical monopolists, many aspects of Bitmain remain a mystery.

In 2017, Bitmain mining machines in a Chinese mining facility

The company is not publicly listed, and its official website does not disclose the global headquarters, CEO, or board member names. The person most closely associated with it is co-founder Jihan Wu, who rarely appears in public and no longer serves as chairman, but it is unclear when he stepped down, who succeeded him, or even if there is a successor.

Until recent months, Bitmain's spokesperson consistently refused to clarify even the most basic information about the company's structure and governance, including the identities of major shareholders. Due to the company selling multiple models of mining machines at different price points, estimates of its annual revenue vary widely. An executive who works closely with Bitmain and requested anonymity cited internal research estimating its annual sales between $2 billion and $3 billion. But even this figure is at best an informed guess.

However, two things are clear: first, Bitmain is headquartered in China; second, it has formed an alliance with one of President Donald Trump's children. Eric Trump, the president's second son, is the co-founder and chief strategy officer of American Bitcoin Corp., based in Miami. The company went public in New York last September, with his shares valued at approximately $548 million at the time. (Since then, the stock price has plummeted significantly due to an overall sell-off of crypto assets.) Eric's brother, Donald Trump Jr., is also an investor, though the size of his holdings has not been disclosed.

American Bitcoin has stated plans to purchase thousands of Bitmain Antminers, ultimately aiming to become the world's largest Bitcoin mining company, and has collaborated with the Chinese company to develop a large data center in Texas.

This collaboration is a remarkable turnaround for Bitmain. Just recently, it faced potentially life-threatening challenges: ongoing investigations in the U.S. questioning whether its equipment posed a national security threat. In May 2024, the White House ordered the removal of thousands of Bitmain mining machines from a facility near a U.S. Air Force nuclear missile base. Last year, a report from the Senate Intelligence Committee warned that Bitmain mining machines near some military bases "pose an unacceptable risk."

In November, Bloomberg News reported that, according to a U.S. official and other informed sources, Bitmain had been the focus of a Department of Homeland Security investigation aimed at determining whether Antminers could be remotely controlled for purposes of sabotaging the power grid or espionage. Sources said this investigation, dubbed "Operation Red Sun," began during the Biden administration and continued at least until the early part of Trump's second term, with both administrations' National Security Councils discussing it.

Bitmain did not respond to detailed inquiries about potential security risks but stated in a December announcement that the company complies with all applicable laws and that reports of it being under investigation "are seriously inaccurate and constitute fake news." An American Bitcoin spokesperson stated that the company "adheres to strict standards regarding national security, grid stability, and operational safety," and "believes that as long as mining hardware is deployed according to modern industrial safety standards, it will not pose a threat to the U.S. power grid or national security."

Bitmain's Irene Gao, photographed in 2025

The current progress of "Operation Red Sun" remains unclear, with the Department of Homeland Security stating to Bloomberg Businessweek that it "cannot comment on ongoing investigations." However, Bitmain's collaboration with American Bitcoin continues, and its aggressive expansion into the U.S. has not stopped. In recent months, the company has opened up slightly to the outside world. For this article, Bitmain arranged for global sales director Irene Gao to be interviewed.

She praised Trump's pro-crypto policies, stating, "For most of our clients, this is a very good thing," but when asked about simple information such as the names of core managers other than CEO Yang Cunyong, she avoided the question. "We just don't want to disclose any information about the company in this way," Irene Gao said.

Security Shadows: U.S. National Security Investigations and Blockades

In addition to the speculators seeking quick riches, the crypto industry has attracted two types of people since its inception: tech geeks and loyal believers. The former primarily focus on the computational and mathematical challenges of creating and trading digital assets; the latter are obsessed with the potential of these tools to change global finance.

The two Chinese entrepreneurs who founded Bitmain happen to belong to these two camps. Jihan Wu comes from a chip design background and previously founded a startup that developed set-top boxes. Micree Zhan was an investment analyst who later became obsessed with cryptocurrency; notably, he translated the original Bitcoin white paper from English to Chinese. Their collaboration began with a dinner in Beijing in 2013.

Wu has said that he went to Wikipedia the next morning to look up information about cryptocurrency and immediately decided to start a business with Zhan. According to several individuals who have interacted with the two and requested anonymity due to concerns about retaliation, they share some common traits: both are somewhat socially awkward, have kept a low profile for most of their careers, and rarely appear in public or give interviews; sources say they both tend to become irritable under pressure, with Wu, whose voice is low and hoarse, reportedly seen loudly reprimanding employees in the office, audible throughout the building.

When Wu and Zhan founded Bitmain in 2013, Bitcoin mining was not yet dominated by publicly traded giant data centers as it is today. It was a world where enthusiasts were frantically chasing the latest cutting-edge equipment. That year, Bitcoin first broke the $1,000 mark, and this cryptocurrency was still in its infancy, with the vast majority of tokens yet to be mined. At that time, better mining machines still had the potential to significantly boost the overall network hash rate, which measures the computational power required to process transactions. As long as miners could get their hands on the most advanced mining machines quickly, they could make a profit.

In 2017, Bitmain employees

Bitmain launched its first mining machine, the Antminer S1, in November 2013. By today's standards, it was very rudimentary, lacking even an outer casing, with the computing boards and wiring exposed. However, as one of the earliest mining machines based on ASIC chips, it was one of the most powerful devices at the time, representing a qualitative leap over competitors and pushing the industry toward dedicated hardware. Subsequent generations of Antminers saw even greater advancements, with each iteration almost redefining the market: if miners did not buy the latest model, they could not compete.

In 2017, Bitcoin's price surged over 250%, further driving demand for Antminers. A round of private financing in mid-2018 valued Bitmain at $12 billion. Its growth attracted widespread attention, with a new round of financing in August 2018 even reaching Jeffrey Epstein's desk. Communications released by the U.S. Department of Justice in January this year showed that the disgraced financier was eager to invest up to $3 million in Bitmain's holding company but had some concerns about the deal structure. The documents did not indicate whether this investment ultimately materialized.

Shortly after this communication, Bitmain submitted a listing application in Hong Kong, disclosing revenues of $2.5 billion, a significant increase from $137 million two years prior. The prospectus showed that Wu held about 36% of the shares at the time, while Zhan held about 20%, with both of their net worths reaching billions of dollars. Other shareholders included Sequoia Capital China Fund, IDG Capital, and Coatue. However, betting wealth on rising cryptocurrency prices also meant facing disaster when prices fell. As the market crashed again, the listing plan was ultimately shelved. The entire industry entered what is known as the "crypto winter," a prolonged period of price stagnation. Meanwhile, the collaboration between Wu and Zhan began to show cracks. According to insiders who requested anonymity, the disagreements stemmed from a strategic dispute: Wu wanted Bitmain to venture into artificial intelligence, repurposing chips for applications like training facial recognition technology, while Zhan, a loyal believer in cryptocurrency, opposed deviating from the company's original mission.

At the end of 2019, Zhan attempted to take full control of the company, and Wu was removed from his positions as legal representative and chairman of Bitmain. Wu subsequently filed a lawsuit in the Cayman Islands, where Bitmain's holding company is registered. A lengthy power struggle ensued, culminating in a dramatic physical confrontation at a government office in Beijing. Former journalist Hazel Hu witnessed this incident in 2020. She recalled that while Wu was waiting to collect Bitmain's paper business license at the Haidian District Market Supervision Administration, his supporters clashed with supporters of Zhan present, and both sides grappled over the documents. Police quickly arrived from a nearby station to stop the conflict, which had spread downstairs and onto the street.

The following year, Zhan admitted defeat and resigned as CEO and chairman of Bitmain. (The disputes between the two were eventually settled; Zhan now serves as chairman of mining machine manufacturer Bit Deer Group and a crypto investment platform.) Despite internal turmoil, Bitmain continued to expand, especially after Bitcoin prices began to rise again in 2020. As the mathematical challenges between mining companies and profits became increasingly complex, Antminers became essential. "They are currently the most efficient devices," said Vishnu Mackenchery, senior director of corporate development at U.S. Compass Mining.

Antminers being assembled at a factory in Shenzhen

At that time, Bitmain's sales were highly concentrated in the domestic market. Data from the Cambridge Centre for Alternative Finance indicated that in 2019, China accounted for about three-quarters of the global Bitcoin mining hash rate. However, in 2021, the Chinese government severely cracked down on the crypto mining industry, citing high energy consumption and carbon emissions. The result was a massive outflow of miners to regions with relatively cheap electricity and friendly regulatory environments—conditions particularly prominent in some parts of the U.S. As a manufacturer of mining machines rather than a mining company, Bitmain was not shut down, continuing operations in Beijing and establishing distribution centers across Southeast Asia. But from that point on, its future would be determined by the U.S.

After the policy shift in China, Bitmain intensified its sales efforts to U.S. miners and expanded a side business managing mining operations for American clients. To create a public face for the company in the U.S., it also moved Irene Gao to America. Irene Gao joined Bitmain shortly after graduating from university in 2016, and when she first arrived in the U.S., she often dragged a suitcase, traveling between cities to pitch products to clients. Like many aspects of Bitmain's information, sales figures and market share during this period remain opaque, but industry veterans say there is no doubt it is becoming a leader.

However, the company soon found itself affected by geopolitical tensions. During Trump's first term, the White House imposed a 25% tariff on various Chinese electronic products, prompting Bitmain to begin rerouting products through Thailand, Malaysia, and Indonesia, a common practice among Chinese manufacturers, but U.S. authorities viewed this as a violation of customs regulations. President Biden largely maintained these tariffs.

In 2022, U.S. Customs and Border Protection inspected a batch of Antminers shipped to Connecticut mining company Sphere 3D Corp. After opening one device, staff found tiny "Made in China" labels on internal components. According to Patricia Trompeter, then-CEO of Sphere 3D, this batch of 4,000 mining machines was detained for three months. Out of concern for further delays, some miners began to diversify their risks by shifting orders to competitors that had established production bases in the U.S., while Bitmain had not yet done so.

The most severe accusations against Bitmain are far more lethal than tariff evasion: whether its mining machines could be tampered with for purposes beyond mining. In 2017, suspicions began circulating in the crypto community when an industry media outlet reported that Antminers contained built-in code allowing Bitmain to shut them down remotely. The company quickly confirmed the existence of this code but claimed its purpose was legitimate, allowing the machines to become inoperative if stolen, similar to how Apple allows users to lock lost iPhones. Bitmain later stated it had removed this feature, but two years later, tech bloggers discovered similar code again; the company promptly released a security patch.

According to an anonymous source familiar with internal confidential reviews, during the Biden administration, U.S. officials commissioned a study to assess whether Bitmain mining machines and other Chinese-made mining machines could pose national security risks. The source stated that the investigation focused on two different directions: first, whether the mining machines could be used for espionage. Crypto hardware experts believe that given their highly specialized engineering design, this possibility, while not completely impossible, is extremely low; second, and more importantly to the U.S. government: the potential impact of remote shutdowns on the U.S. power grid.

When a large power-consuming unit (such as a steel mill) goes offline, it is usually a planned, gradual process, with power consumption decreasing over two days or longer. The power consumption of Bitcoin mining facilities may be comparable, but they can shut down in seconds. The source stated that U.S. officials are concerned that such "shock events" could cause a sudden imbalance between power generation and consumption, potentially disrupting supply stability.

The most frightening scenario is that Chinese authorities could remotely command thousands of Bitmain mining machines to shut down, especially those located near military bases or other critical infrastructure reliant on the same power source. "Anyone who hacks into an entire data center, whether it's for AI, cryptocurrency, or cloud service data centers, could cause severe damage to the power grid," said Michael Bedford Taylor, a professor of electrical and computer engineering at the University of Washington, but he also cautioned that Bitmain itself is unlikely to have the motive to do so.

In the spring of 2024, the Biden administration publicly expressed security concerns about a mining facility located near Cheyenne, Wyoming, covering 12 acres, where a company with ties to China had installed up to 15,000 mining machines, most of which came from Bitmain. The investors in the facility hoped it would one day become one of the largest mining sites in the U.S., benefiting from Wyoming's low land costs and abundant power resources. It is conveniently located about a mile from the U.S. Air Force's Warren Air Force Base, one of three bases where the U.S. Air Force deploys land-based nuclear missiles.

On May 13, 2024, Biden issued an executive order mandating that the mining facility operator, MineOne Partners LLC, shut down the project. The document stated that the Committee on Foreign Investment in the United States had "identified national security risks." Although it did not explicitly mention concerns about the power grid, the order noted that risks included "the presence of dedicated foreign-sourced equipment that could facilitate surveillance and espionage activities." The mining machines were quickly loaded onto trucks and removed.

Political Alliance: Joining Hands with the Trump Family for a Turnaround

This was a significant and public setback, with the U.S. government explicitly linking Bitmain's equipment to at least the possibility of malicious use. But just a few months later, the company began to advance a project that could completely change its situation.

In 2017, a Bitmain mining facility in China

According to Michael Ho, Eric Trump's crypto business partner and a Chinese-Canadian businessman, a series of meetings that led to the president's son establishing a Bitcoin mining company began in late 2024. Like Bitmain co-founder Micree Zhan, Michael Ho is also a loyal believer, boasting that he mined his first Bitcoin as a teenager before reaching the legal drinking age. When he met Eric, he and his partner Asher Genoot were operating Hut 8 Corp., a mining company based in Miami and an important customer of Bitmain's Antminers.

Michael Ho recalled that the two initially "met through many mutual friends in the Florida circle." He said that after several meetings in Miami and surrounding areas, their relationship quickly warmed up, including a discussion at the Jupiter Trump National Golf Club. Eric Trump, who has long served as an executive in the family real estate business, was increasingly involved in the crypto space.

After previously calling Bitcoin a scam, his father embraced the industry during the campaign, promising to make the U.S. a "Bitcoin superpower" at a conference in Nashville. In September 2024, the Trump family established a company called World Liberty Financial, with a grand yet somewhat vague vision of providing "everyone access to tools and opportunities that have long been restricted."

Initially, World Liberty Financial appeared to fail, as speculators largely ignored its initial token. These tokens neither granted holders rights to share in the company's revenue nor could they be resold after purchase, completely contradicting the original intent of traditional investments. However, after Trump's re-election, the situation changed rapidly: prices of various digital assets skyrocketed, and businesspeople eager to get close to the presidential family and access resources poured investments into its many enterprises. The Wall Street Journal reported in February this year that a key member of the ruling family of Abu Dhabi, Sheikh Tahnoon bin Zayed Al Nahyan, agreed to invest $500 million in World Liberty Financial just before the president's inauguration.

In September last year, Eric Trump, co-founder and chief strategy officer of American Bitcoin, and CEO Michael Ho were interviewed by Bloomberg Television in New York

Michael Ho stated that it was not difficult to persuade Eric to enter the mining industry. "After we communicated face-to-face and deepened our understanding, we quickly hit it off," he said in an interview with Bloomberg News last year. In March 2025, the two publicly announced their complex plan. Just a month earlier, Eric and Donald Jr. had participated in founding American Data Centers. Now, Hut 8 would acquire 80% of the company using mining machines as payment instead of cash or stock.

After acquiring all of Hut 8's Bitmain mining machines, American Data Centers was renamed American Bitcoin. A presentation aimed at investors claimed that the goal of this new enterprise was "to become the largest and most efficient professional Bitcoin mining company in the world while building a strong strategic Bitcoin reserve."

Just a few months later, American Bitcoin decided to go public, not through the traditional IPO's required disclosures and strict scrutiny, but by merging with a small company, Gryphon Digital Mining Inc. This method is commonly used by crypto companies and has received regulatory approval. Michael Ho serves as CEO, with Genoot as executive chairman. Eric is responsible for business strategy, but due to his numerous other business interests, the time he can commit is expected to be quite limited. An American Bitcoin spokesperson stated that Eric is "a core member of the company's leadership team."

All of this ultimately led to an awkward situation. As a candidate, Donald Trump had promised to ensure that Bitcoin was "mined, minted, and manufactured in the U.S.," while the Antminers relied upon by American Bitcoin are entirely Chinese products. Just a year earlier, the Biden administration had classified these mining machines as potential national security threats, yet now they were to generate profits for the two sons of the next president. Perhaps realizing these contradictions and the overall "America First" sentiment, Bitmain quickly announced adjustments to some of its business plans. Irene Gao stated that the company would establish new headquarters and assembly lines in Texas or Florida and hire 250 local employees.

Bitmain's circuit boards

As these plans progressed, Michael Ho downplayed security concerns regarding Bitmain products. "The facts have proven that these ASIC chips are programmed for one purpose only: to compute against the SHA-256 algorithm," he said in a September interview with Bloomberg Television. He described choosing Bitmain mining machines as procuring the most advanced technology: "Bitmain remains the most competitive and efficient."

Even with the most powerful equipment, Bitcoin mining is now harder than ever to profit from. Over the past six months, Bitcoin's price has dropped more than 40% to around $74,000, with about 95% of the fixed supply already mined. American Bitcoin's stock price has fallen nearly 90% from its peak in September last year, with a market capitalization of about $960 million. On February 26, the company reported a fourth-quarter loss of $59 million.

Despite this, Eric's association with the company still brings him substantial returns. Filing documents show no indication that he invested a significant amount of money at the company's inception, but at current stock prices, his holdings are valued at about $7.5 million. If Bitcoin rebounds, whether driven by changes in government policy or other market factors, the value of his and his brother Donald Jr.'s shares is likely to rise significantly.

Bitmain is working with clients to address accusations of security vulnerabilities. Months after the Biden administration ordered the removal of Bitmain mining machines near the Wyoming nuclear missile base, U.S. mining company CleanSpark Inc. took over the site. The company quickly reinstalled mining machines procured from Bitmain's U.S. subsidiary, with contracts stipulating that all equipment "is not of Chinese origin" or from any country under U.S. sanctions. CleanSpark stated in a release that it prioritizes national security and "operates completely legally," adding that its operational agreement in Wyoming "was finalized only after receiving approval from the Committee on Foreign Investment in the United States."

Meanwhile, American Bitcoin is expanding its collaboration with Bitmain. The company disclosed in documents submitted to the U.S. Securities and Exchange Commission in September that it would procure over 16,000 additional Antminers. The terms are unusual: the company does not need to pay cash but will pay through "staking" Bitcoin, with the price undisclosed, which amounts to an option structure that can be exercised at any time within two years. Some industry experts believe this arrangement, especially the long exercise period, is extremely generous for American Bitcoin.

Another collaborative project between the two companies is taking shape in the Panhandle region of Texas: a data center roughly the size of five football fields, likely to be one of the largest Bitcoin mining facilities in the world. Bitmain and American Bitcoin jointly designed this project, named Vega, which began operations in June. According to Michael Ho, the mining facility is equipped with the latest liquid-cooled Antminers.

Bitmain views American Bitcoin more as a partner than merely a customer. Last year, Irene Gao and Genoot jointly attended the cryptocurrency conference Bitcoin Asia held in Hong Kong. The two sat on stage with a large screen behind them displaying the Vega project, reportedly costing $500 million to build. Irene Gao claimed that Bitmain's latest Antminer S23 Hydro had received over $1 billion in pre-sale orders. This practical gray mining machine is priced at $17,400. "All these machines will be produced in the U.S.," she said.

The next day, Irene Gao was interviewed by a Businessweek reporter in a suite at the Grand Hyatt Hotel in Hong Kong. She emphasized that the sales of Antminers and joint projects like Vega are just the beginning of Bitmain's collaboration with American Bitcoin. "We can work with them very flexibly, fully customizing according to their needs," she said, "We will deploy the mining machines in their infrastructure, which can be packaged and sold to our clients or to their affiliated companies." But she repeatedly declined to answer more specific questions about the relationship between the two companies.

What Irene Gao most wanted to discuss was her optimism about the future of Bitcoin, especially Bitmain's future. She indicated that part of her confidence comes from the development of such meetings. "You will see many influential people," she said, "not just crypto enthusiasts, but representatives from traditional finance." Among them was a heavyweight guest who would speak the next day: Eric Trump. He would ignite the audience with an inspiring prediction: Bitcoin prices would exceed $1 million, about 14 times the current level. "This is a good sign," Irene Gao said when discussing the number of attendees, "a scene of prosperity."