Bitcoin miners are using their computing power to serve the hungry AI boom, and investors are taking notice.
Companies that once focused solely on cryptocurrency mining are signing long-term contracts to use their land, power and data centers for AI workloads.
Miners like Irene (Erin), riot (Riot control), Terawolf (Wolf), and the crypto miner (Sèvres) are just a few of the players shifting their resources toward high-performance computing (HPC) and AI infrastructure.
Industry insiders point to the promise of better returns from AI compared to cryptocurrency mining.
“Bitcoin mining is not enough anymore,” Daniel Keller, CEO and co-founder of cloud infrastructure company InFlux Technologies, told Yahoo Finance.
A crowded mining field and Bitcoin price fluctuations have put pressure on profit margins. Jefferies analysts say the competitive mining environment and price fluctuations could impact the bottom line. Jefferies analysts Miners’ earnings estimates fell More than 7% in September as Bitcoin prices fall.
Read more: What is Bitcoin and how does it work?
every four years, Bitcoin “halving” event Cuts mining rewards in half, further eroding revenue over time.
“Because timelines are cut in half, mining is less profitable in the long run than AI computing,” Keller said.
“In addition, demand for AI workloads is at a peak right now, and Bitcoin miners have what AI data centers require: stable, affordable power housed in moderate environments,” he added.
This pivot comes with the boom in demand for artificial intelligence and the presence of heavyweight companies such as ChatGPT maker OpenAI (OPAI.PVT) and chip makers like Nvidia (NVDA), AMD (AMD), and Broadcom (Afgo) eye-catching New deals in the space.
Cloud expanders like Google (Google, Google), Microsoft (MSFT), Amazon (Amzn) faces a multi-year network and allows for a delay in AI data center capacity ramp-up, creating an opportunity for smaller, energy-ready operators to help meet demand.
“Access to ready, cheap renewable energy combined with data center capabilities makes bitcoin miners attractive partners for AI cloud providers looking to accelerate time to market and build resilient, high-performance computing clusters,” Bernstein’s Gautam Chogani said in a note earlier this month.
Bernstein analysts estimate that network-connected power for bitcoin miners could reduce data center deployment timelines by up to 75%. Additionally, their current infrastructure is “closer to AI data centers” than traditional ones.
“This allows Bitcoin miners to retrofit existing Bitcoin mining facilities for AI/HPC with low additional capital expenditures,” Chogani wrote.
