Bitcoin mining used to be only about one thing: making money while powering the world’s biggest digital monetary network. But now, the entire industry seems to be undergoing a major transformation.
To adapt and survive in a fast-changing tech world, miners are pivoting to artificial intelligence (AI) and high-performance computing (HPC). A report by Bitfinex highlighted this transformation, saying it will open up new revenue streams and change the way these companies work.
The shift is happening as Bitcoin mining faces more and more challenges, from rising energy costs to unpredictable bitcoin markets. AI and HPC offer miners a new opportunity. According to Piper Sandler, this is still in the early days but the potential is huge.
Related: Bitcoin Mining Faces Profitability Challenges After 4th Halving
The pivot is driven by the overlap between bitcoin mining and AI workloads. Both are power-hungry and Bitcoin miners already have the infrastructure to support AI and HPC. The economics are too good to ignore, said Piper Sandler in its report.
One of the main reasons this makes sense is miners have access to power. This gives them an advantage to serve AI companies that would otherwise have to wait to build new data centers. Piper Sandler estimates AI/HPC contracts could triple earnings for some miners.
Bitcoin miners are in a unique position because they can repurpose their infrastructure for AI and HPC workloads. Deals like Core Scientific’s partnership with CoreWeave and TeraWulf’s partnership with Core42 have already started this transformation.
TeraWulf Inc., a sustainable Bitcoin mining company, is one of the biggest players in this shift. Known for their use of zero-carbon energy, they are entering the AI/HPC market. A big step was their partnership with Core42, which shows TeraWulf’s bigger plans.
According to their recent financials, TeraWulf has seen 131% revenue growth over the last year and 60% gross margin.
TeraWulf is upgrading its Lake Mariner facility, which is one of the most valuable power assets in its possession. It plans to expand capacity to 770 megawatts and has already set big goals for AI/HPC. By mid 2025 it will build 50 megawatt data centers for AI workloads.
The reports say the AI market is a high-growth market with higher margins than bitcoin mining.
While the pivot to AI and HPC is looking good, it’s not without its challenges. Switching could be expensive and the competition in AI is fierce. TeraWulf says it has to navigate regulatory changes, but believes it has the technical expertise to succeed in this space.
Many miners still rely on Bitcoin as a revenue source so they are exposed to the market’s rises and falls. A sudden drop in bitcoin’s price could impact their ability to fund AI/HPC expansion.
Analysts believe that for miners who make the pivot, the upside is big.
AI and HPC services have higher margins and more stable revenue streams. This diversification also reduces miners’ dependence on Bitcoin, making their business model more resilient, the reports say.
Piper Sandler analysts expect more announcements from big players like Riot Platforms, Hut 8 and Galaxy Digital in 2025. As these companies finalize deals, the industry seems more eager than before to move toward AI and HPC.
