- Transition to AI and HPC
- Criticism and Risks
- Examples and Prospects
According to a report from investment firm VanEck, Bitcoin miners could increase their annual revenues by approximately $13.9 billion by partially transitioning to provide energy for artificial intelligence (AI) and high-performance computing (HPC) markets by 2027.
Transition to AI and HPC
In its Aug. 16 report, VanEck stated that AI companies need energy, which Bitcoin miners have. For miners facing profitability risks from volatile operating costs and Bitcoin's (BTC) price fluctuations, it may be beneficial to redirect some of their energy capacity towards the growing AI and HPC sectors.
Criticism and Risks
Investment firm Kerrisdale Capital recently called the Bitcoin mining industry an 'industry of snake oil salesmen.' Sahm Adrangi, the firm's chief investment officer, claimed that the current business models are not viable and deliberately dilute. 'They issue shares, they take those shares to invest in the business. But there are no returns,' Sahm Adrangi recently told Cointelegraph.
Examples and Prospects
Several companies have already incorporated HPC capacity into their operations. Core Scientific, the fourth largest Bitcoin miner by hash rate, recently landed a 12-year contract with AI hyperscaler CoreWeave, expected to generate over $3.5 billion in revenue by supplying 200 MW of infrastructure. Meanwhile, Canadian miner Hive Digital Technologies continues to expand its facilities to offer HPC services to companies in gaming, artificial intelligence, and graphics computing, according to its Q4 2023 report.
The new diversification strategy comes amid a challenging year for Bitcoin miners, especially following the April Bitcoin halving that reduced mining rewards for adding a block to the blockchain. Many companies are seeking alternative ways to increase profitability and are considering collaborations with AI and HPC sectors.
