PhoenixGroup is pushing deeper into artificial intelligence after a 43% revenue slidein 2025, signing French developer DC Max to build an 18-megawatt AI data centerin Lyon, the first European deployment in what the Abu Dhabi-listed firm sayswill scale to more than one gigawatt of capacity.Singapore Summit: Meet the largestAPAC brokers you know (and those you still don't!)The Lyonfacility is the inaugural site under what Phoenix is calling its European DataCenter Platform, a partnership structured around DC Max's pipeline that thefirms value at roughly $8 billion. Phoenixsaid it has acquired the land, secured permits and lined up grid access, withconstruction set to begin in July 2026 and handover scheduled for the fourthquarter of 2027 or the first quarter of 2028.The movefollows a now-familiar playbook in the Bitcoin mining sector. Full-year revenueat Phoenix (ADX: PHX)fell to $117.7 million from $205.7 million the year before, while the firmreported a $271.7 million loss attributable to shareholders against a $167.4million profit in 2024. Like Wall Street peers Core Scientific,Riot Platforms and Bitfarms, Phoenix is steering its power-hungry infrastructure toward AI tenantswilling to pay several times more per megawatt than current coin economicssupport.From Mining Losses to AISitesThe 2025annual report Phoenix published last month showed the scale of the decline.Trading revenue dropped 69% year on year, hosting revenue fell 62% andself-mining revenue slipped 21%, dragging full-year revenue below $118 million.Earningsper share swung from a profit of $0.028 to a loss of $0.045, with unrealizedfair value losses of $223.3 million on digital asset holdings driving most ofthe bottom-line damage.The pivothas been telegraphed in steps. Last summer, Phoenix unveiled a digital asset treasuryholding Bitcoin and Solana, becoming the first ADX-listed company to formalize such a structure asan operational buffer against mining cash-flow volatility. Around thesame time, it disclosed internal recruitment for AI divisions and beganscouting sites for AI and high-performance computing capacity. The Lyon dealturns that scouting into the company's first hard commitment outside the Gulf.Co-founderand Group CEO Munaf Ali described the announcement as more than incremental,calling it "a genuine inflection point" for the firm. He added that"the 1GW ambition is not a ceiling; it is a starting point."Bitcoin Miners Crowd IntoAI Real EstateTherepositioning across the listed mining sector has accelerated through 2025 andinto 2026 as post-halving margin pressure squeezed coin economics. Analystshave estimated up to 20% of the industry's power capacity could be repurposedfor AI and HPC by the end of 2027, with Goldman Sachs forecasting U.S. datacenter power demand to grow at a 15% compound annual rate through 2030.Nasdaq-listedCore Scientific recently secured a financingfacility from Morgan Stanley of up to $1 billion to fund its conversion from crypto mining tohigh-density colocation. RiotPlatforms appointed three new board members with data center and AI experience,including a former Meta executive. Bitfarms went further, renaming itself KeelInfrastructure and halting all new Bitcoin mining investment.Thefinancial logic is straightforward. Bitcoin miners typically trade at 6 to 12times EBITDA, while data center operators trade between 20 and 25 times. Aclean operational pivot, with long-term tenant contracts replacing volatilecoin revenue, can support a meaningful multiple re-rating over time.France Targets theHyperscaler BacklogDemand forAI compute in Europe has run ahead of supply, with hyperscalers and largeenterprises booking capacity years in advance. Traditional new-build timelinesof 36 to 48 months leave most operators struggling to keep pace.Lyon offersseveral advantages for developers willing to move quickly. France'ssecond-largest city has an industrial base, dense electrical infrastructure andland prices well below those around Paris, which has emerged as Europe's mostcontested data center market. DC Max alsobrings existing permits and grid agreements on some of its sites, which Phoenixsaid allows it to compress the typical timeline."Thedemand is there. The sites are there," DC Max Chief Executive RomainFremont said in a statement, adding that the tie-up gives the French developeraccess to capital and operational depth that would have been difficult toassemble alone.A 1GW Ambition MeetsExecution RiskThe Lyonsite joins roughly 550 megawatts of capacity Phoenix already operates acrossthe UAE, Oman, North America and Ethiopia, infrastructure originally built forBitcoin mining and now being repositioned for AI and HPC workloads. The firmalso holds a 13.9% stake in Bitzero, a data-center-focused company that listedon the Canadian Securities Exchange last year, while Ali himself has been buying shares to back the pivot strategy.DC Max, forits part, claims a roughly two-gigawatt portfolio and says it is backed by agroup with more than €6 billion in investment experience. PhoenixGroup debuted on the ADX at the end of 2023, and since then its share price hasfallen 60% to the current level of AED 0.90.This article was written by Damian Chmiel at www.financemagnates.com.