Bitland's AI business has become a disaster area u

Bitcontinental under the storm of layoffs: artificial intelligence business has become a disaster area

bitcontinental, the world's largest miner, is experiencing a fierce shock

many insiders revealed to the interface that bitland has just completed a round of large-scale layoffs, including blockchain, artificial intelligence, chips and other business lines, of which the highly expected artificial intelligence business has become the hardest hit area of this round of layoffs

bitland occupies more than 70% of the market share in the mining industry. In the digital currency bull market in 2017, this company became the biggest winner, with an annual net profit of nearly 5billion yuan. However, in 2018, the industry turned bear rapidly, and the mining machinery was unsalable. The revenue and net profit of bitcontinental fell sharply. Under pressure, bitland began to lay off a large number of staff, and many unprofitable innovative businesses were also cut off

in addition to the layoffs, the dual CEO management structure that bitland has been implementing also has sudden changes

several insiders confirmed to the interface that Wu Jihan and Zhan ketuan, two co founders of bitland, have both resigned as CEO and only served as directors. The new CEO is Wang Haichao, a project director within the company, but the change has not been officially announced in the company

in this regard, bitland said to the interface that the above rumors are untrue

at the end of September last year, bitmainland submitted a prospectus to the Hong Kong stock exchange, and there has been no follow-up since then. On January 23, during a media interview at the Davos forum, Li Xiaojia, President of the Hong Kong stock exchange, made a negative statement about the IPO of mining machinery manufacturers in Hong Kong stocks

in the past, I made billions of dollars through business A. suddenly, I said I would do business B in the future, but I haven't made any achievements. In other words, the business model of B is better, so I don't think the business model of a, which was originally listed, is sustainable. Besides, the supervision didn't care before, and then you began to manage it. Can you still do this business and make this money? Li Xiaojia believes that such enterprises do not conform to the listing adaptability principle of the Hong Kong stock exchange

although he did not explicitly refer to bitland, with a series of turbulence, the world's largest mining machine manufacturer has gone from its former glory to its lowest point since its establishment

layoff storm

during Christmas 2018, bitland began to lay off staff. The reason given by the company is strategic adjustment. This round of layoffs covers a wide range. Wu Feng, the laid-off employee, told the interface that bitland offered two compensation schemes, n+2 and n+1+3, of which 3 in n+1+3 refers to the company's equity equivalent to 3 times the employee's monthly salary

Wu Feng's department is the Copernicus team that once flourished in bitland. Copernicus is the only BCH (bitcoin cash, virtual digital currency supported by bitland) development team in China. During the peak period, the team had more than 40 people, and the whole team was cut in this round of adjustment. There was no hope of listing, so he chose the compensation scheme paid in cash

according to many insiders, the scale of this round of layoffs in bitland may be as high as 50%, and the specific figures are controlled by the human resources department of bitland, but even if this figure is not reached, the proportion of layoffs in this round is quite high

according to Wang Lei, a former employee close to the core of bitland, before the layoff, bitland had about 3000 employees, including more than 1000 employees in marketing, sales, administration, etc., and about 2000 employees in the mining machinery department and AI department. Among the layoffs, the proportion of layoffs in mining machinery business was 340%, while the proportion of layoffs in AI business reached 50%. After the layoffs, the total number of employees in bitland has been reduced to more than 1000

before layoffs, the company size of bitland experienced a round of rapid expansion

in the middle of 2017, the total number of employees in bitcontinental was only 300 or 500, and by August 2018, it had risen to more than 3000. This year, bitland took AI chip as a new business to develop. Most of these new employees were technicians related to AI chip research and development

the AI chip business of bitland includes cloud chip and terminal chip. According to Wang Lei, the relatively less important terminal chip business has become the hardest hit area of this layoff. The cloud chip business is more important, but it is also reducing the number of people

however, this statement has also been denied by bitland

according to the interface, the terminal chip team of bit mainland is located in Taiwan and is a company called core channel interconnection. The company was founded in July 2017, with a total of about 200 employees. According to Taiwan media reports, at the beginning of its establishment, Xindao Internet offered a salary higher than that of other first-line enterprises, and frantically poached people in Taiwan's IC circle. It even led to an official letter from MediaTek, reminding Xindao Internet to respect the intellectual property rights and business secrets of its peers to avoid breaking the law

according to the semiconductor industry media core technology report, in late December 2018, core interconnect successively interviewed R & D personnel and planned to reduce the recruitment of about 200 R & D engineers by 50% to reduce costs

the interface visited the office address of Xindao Internet in Hsinchu on February 18 and found that the company was still operating normally, but there were not many staff

after the news of layoffs came from core Internet, bitland responded that core Internet is not a subsidiary of bitland, and the two sides only have business cooperation. However, according to Wang Lei, the business cooperation between core Internet and bitland is more than business cooperation. Bitland initially paid two months' salary, and then (core Internet) was responsible for its own profits and losses

not only that, the team that cooperates with terminal chips to make hardware devices, such as development boards, cameras, and application software development, such as face matching, has also been laid off

in October, 2018, bitland announced that it would invest 1.3 billion yuan in Fuzhou Minhou to set up the project of Computex Technology Industrial Park. Computex is the brand name of bitland's AI cloud chip. According to the interface, suanfeng Technology Industrial Park is also laying off staff recently, and some employees who have been employed for less than three months have received layoff notices

why is bitland crazy about layoffs? The shift of virtual digital currency into bear market in 2018 is one reason, but not all

lost the bet this time

in this circle, people are gamblers in terms of personality. Whether selling mining machines, digging coins or frying coins are the same as gambling. Wang Lei said

judging from the rich history of bitland, it is indeed a successful gambling story

bitland was founded in 2013. Shortly after its establishment, it encountered a bear market and almost went bankrupt. When other competitors were washed away by the cold winter, with its adherence to blockchain and digital currency, bitland still invested heavily in the research and development of mining machines in the bear market, and finally rose rapidly in the industry bull market in 2017, becoming an industry monopoly that accounts for 70% of the mining machine market. 1: serial port setup bugs

the soaring price of digital currency and its monopoly market position have brought huge profits to bitland. In 2017, the net profit of bitland was US $700million (about 4.75 billion yuan), and in the first half of 2018, it was as high as US $740million (about 5 billion yuan). The valuation of bitcontinental also reached more than $15billion

looking back, bitland blocked all its wealth every time, and gambled successfully several times. An investor who has investigated bitland said to the interface

mining machine production is an industry that attaches great importance to seizing time. Because after the mining machine is produced, it takes only twoorthree months for the mining machine to earn money. When the computing power accumulates rapidly, the mining income decreases, and the miners' willingness to buy the mining machine decreases, and the mining machine will be unsalable. Wu Jihan once said in an interview with Caixin that it is very time-consuming to make mining machines, and the relevant experimental specifications require the factory to work overtime day and night

the same is true for the mining chip production upstream of the mining machine. Generally, chip production needs to go through the links of design, drawing, streaming, packaging, testing and mass production. Streaming refers to the small-scale trial production of the designed chip. After the successful streaming, the chip is tested to verify whether the chip performance meets the requirements, and then enter the mass production process

the testing process often takes three to five months. But in bitland, and even in the whole mining machine industry, there is almost no testing link for chips. Once the chip is successfully streamed and can run, it will be put into production immediately. Generally speaking, the chip iteration speed of the mining machinery industry is based on half a year, and even shortened to three months when the market is hot

also because of the rush time, bitland hardly made up with other manufacturers when it was in TSMC current chips. Patchwork refers to that because of the high cost of mold opening, many chip manufacturers stream chips together to share the cost of streaming. The advantage of patchwork is that it can save costs, but the disadvantage is also obvious. It takes a long time to wait for other manufacturers

when the chip was streamed, bitland never made up for time and spent a lot of money. Among all chip manufacturers, except apple, which has the strength to say all inclusive, even Huawei has to wait for others. Wang Lei said that after the chip is released, bitland will place a large number of orders with the OEM in order to seize the production capacity, so that competitors can only wait for the production line to be empty, and the time difference between them is often the time when bitland mining machinery explodes

the best-selling miner in bitland is ant S9 launched in June 2016. Until Q1 2018, the sales of this miner still accounted for nearly 70% of the total sales revenue of miner. However, after the launch of S9, the request for equity distribution was rejected by zhanketuan. Yang Zuoxing, a core technical employee, left bitland and founded Shenma mining machine, becoming a competitor of bitland

after Yang Zuoxing left, the research and development of mining machine chips in bitland was led by zhanke group. Although heavy money was invested, it has not been progressing smoothly

according to Wang Lei's estimation, since 2017, bitland has failed to stream mining machine chips at least four times, including 16nm, 12NM and 10nm chips, of which 16nm chips have failed twice, causing bitland to lose at least 6billion to 8billion yuan. Bitcontinental officials do not recognize this data

composition of bit continental sales cost. Source: prospectus

however, several data that can be referred to is that according to the prospectus of bitcontinental, in 2017, processing fees and raw material costs (mainly referring to chip manufacturing and packaging and testing costs) cost $973 million (about 6.6 billion yuan), an increase of 9 times over the previous year. In the first half of 2018, this cost was as high as US $1476 million (about 10billion yuan), an increase of 11 times year-on-year

this circle is to seize time and place orders in a gambling way. Gambling lost 5billion, lost out, gambling became 10billion to earn hands. Wang Lei said

in Wang Lei's view, at least these times, bitland lost the bet. The 7Nm chip, which invested heavily in research and development, caught up with the bitcoin bear market after its launch, and suffered from unsalable due to its high price. A mining machine salesman in Shenzhen told the interface that now second-hand mining machines are sold more, with prices ranging from hundreds to 1000 yuan, and first-hand mining machines are sold very little. The 7Nm chip miner in bitland costs four or five thousand yuan, and few people buy it because it is too expensive

a senior person in the blockchain industry said that the price of bitcoin up to 30000 yuan is the shutdown price. Now mining machines can't be sold, and few dare to take orders

transformation dilemma

in the past two years, bitland has spent a lot of money on the research and development of mining machine chips, but the effect is not good. By 2018, the virtual digital currency has rapidly turned into a bear, and the sales of mining machines have almost stagnated, with bits