The decline in bitcoin mining income after the 2024 halving has prompted many companies to explore alternative revenue sources, such as artificial intelligence.
Transition to Artificial Intelligence
The 2024 Bitcoin halving cut block rewards to 3.125 BTC, significantly reducing miners' incomes. To decrease reliance on volatile bitcoin revenue, some companies have started upgrading their energy-dense data centers, transforming them into computing capacities for AI. This approach allows them to generate steady income by offering AI cloud services or renting out excess computational resources.
Success Stories
Core Scientific serves as a prominent example of a successful transition to AI. After filing for bankruptcy in late 2022, the company signed a 12-year, $3.5 billion contract with CoreWeave, enabling the use of its infrastructure for AI computing needs. Other companies like Hut 8 and Hive have also begun to offer AI-based computing services, reflecting the growing interest in this sector.
Risks and Challenges of AI Transition
The shift to AI presents both opportunities and risks. Key risks include high initial infrastructure costs, client instability, and the need for reliable power supplies. Miners should carefully assess the potential benefits of investing in AI and prepare for changes in the market and regulatory landscape.
Diversifying revenue through artificial intelligence is becoming a critical strategic direction for bitcoin miners, especially in light of historic changes within the cryptocurrency ecosystem.
