Miners’ pivot to AI sends stocks soaring
Bitcoin miners are using their computing power to service the AI boom, and investors are taking notice.
Companies that once focused solely on mining digital tokens are signing long-term contracts using their land, energy and data centers for AI workloads.
Miners like IREN (IREN), Riot (RIOT), TeraWulf (WULF), and Cipher Miner (CIFR) are just a handful of players shifting their resources to high-performance computing (HPC) infrastructure and artificial intelligence.
Industry insiders point to AI’s promise of better returns than crypto mining.
“Bitcoin mining doesn’t work anymore,” Daniel Keller, CEO and co-founder of cloud infrastructure company InFlux Technologies, told Yahoo Finance.
A crowded mining space and Bitcoin’s price fluctuations have squeezed margins. Jefferies analysts note that the highly competitive mining environment and price fluctuations could impact profitability. Jefferies analysts I guess miner profits are falling While Bitcoin prices were falling, there was an increase of more than 7% in September.
Read more: What is Bitcoin and how does it work?
Every four years, Bitcoin’s “halving” event It cuts mining rewards in half and further reduces revenue over time.
“Mining is less profitable than AI computing in the long run due to the halving of programs,” Keller said.
“Additionally, demand for AI workloads is currently through the roof, and BTC miners have everything AI data centers need: affordable and consistent power hosted in temperate environments,” he added.
This development comes as AI demand is on the rise, with heavyweights like ChatGPT maker OpenAI (OPAI.PVT) and chipmakers like Nvidia (NVDA), AMD (AMD) and Broadcom (AVGO) making new deals in this space.
Cloud hyperscalers like Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN) are facing multi-year grid and allowing delays for more AI data center capacity, creating an opportunity for smaller, power-ready operators to help meet demand.
“Access to readily available and cheap renewable energy, combined with data center capabilities, positions Bitcoin miners as attractive partners for AI cloud providers looking to accelerate time to market and build resilient high-performance computing clusters,” Bernstein’s Gautam Chhugani wrote in a note earlier this month. he said.
Bernstein analysts estimate that the grid-connected power of bitcoin miners could shorten data center deployment timelines by up to 75%. Additionally, their existing infrastructures are “closer to AI data centers” than traditional ones.
“This allows Bitcoin miners to retrofit their existing BTC mining facilities with low incremental capital expenditures for AI/HPC,” Chhugani wrote.
