Shares of Australian Bitcoin miner Iris Energy dropped 14% on Friday after Culper Research questioned the firm’s ability to serve high-performance computers for AI.

Iris Energy (IREN), the Australian Bitcoin mining company, saw its shares plunge 14% on Jul. 12. This came after short seller Culper Research issued a report raising concerns over Iris’ capabilities to provide high-performance computing (HPC) services for artificial intelligence (AI) in Childress, Texas.

In a Jul. 11 report, Culper stated that Iris’ flagship Childress buildout “lacks numerous features that are critical to HPC applications.” The report also noted that the firm’s management — Iris Co-CEO Daniel Roberts and his brother Will — began selling their shares in February, the first time since Iris went public.

“We believe IREN is a painfully transparent stock promotion that will unravel as investors realize the company’s HPC claims are nonsense and IREN remains a cash guzzling machine.” — Culper Research

Analysts at Bernstein refuted some of Culper’s statements, highlighting that Iris Energy “has not claimed it intends to retrofit its bitcoin mining site in Childress to AI.” According to Bloomberg, Bernstein rates Iris Energy as “Outperform” with a $26 target price.

Shortly after the report was released, the price of IREN plunged 14% down to $10.8, though it later bounced to $11.2, according to data from Google Finance. As of press time, Iris Energy’s market capitalization is staying at $2.09 billion, with no public statements from the company. Founded in 2018, Iris Energy raised over $410 million by selling nearly 40 million shares to fund its expansion.

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