America’s Biggest Bitcoin Miners Are Pivoting to AI

One day in June 2024, I stood up against the obstruction of a sprawling concern installation a fewer miles extracurricular of Corsicana, Texas. Over a metallic gate, I watched a agleam yellowish excavator claw astatine the ungraded and flatbed trucks shuttle to and fro. A hangar-like operation with a gleaming achromatic extortion stretched hundreds of meters on the other perimeter. The institution that owned the plot, Riot Platforms, was busily constructing the world’s largest bitcoin mine.

A twelvemonth and a fractional later, a projected two-thirds of the installation is being repurposed to accommodate AI and high-performance computing (HPC) tasks. Less a temple to bitcoin, the installation is poised to go an AI megafactory.

Across the US, an identical signifier is playing retired astatine bitcoin mining facilities owned by a assortment of operators. In the past 18 months, astatine slightest 8 different publically traded bitcoin mining companies—Bitfarms, Core Scientific, Riot, IREN, TeraWulf, CleanSpark, Bit Digital, MARA Holdings, and Cipher Mining—have announced plans to pivot either partially oregon wholly to AI.

The alteration reflects rabid request among AI companies for information centers equipped to grip the energy-intensive workloads required to bid their models. Ironically, arsenic the AI arms contention intensifies, large-scale bitcoin mining firms—which contributed to the AI roar by pouring billions of dollars into information halfway infrastructure—are being forced to reinvent themselves.

“Bitcoin mining created the blueprint for the AI compute roar and the modern information center,” says Meltem Demirors, wide spouse astatine the VC steadfast Crucible Capital, which invests successful companies successful the crypto, compute, and vigor sectors. “They person recovered that their outgo of superior is overmuch little if they spell into the AI narrative. They person the powered shell, they’re ripping retired the [mining machines], and their tenant is bringing the GPUs.”

A Perfect Storm

To triumph the close to process a batch of bitcoin transactions and assertion the associated reward, mining companies vie to lick a computational puzzle. The profitability of a mining cognition depends mostly connected the going terms of bitcoin, the magnitude of compute thrown astatine the puzzle, and the outgo of powering the specialized mining hardware indispensable to stay competitive.

In the past fewer years, with advances successful hardware, the magnitude of contention connected the bitcoin web has accrued astatine an exponential rate, meaning that winning a bitcoin reward has required ever much compute. In 2024, meanwhile, the size of that reward fell by half—as happens astir each 4 years—to 3.125 bitcoin. Against that backdrop, the caller diminution successful the terms of bitcoin to astir $85,000—a 30 percent driblet from its 2025 peak—has created a cleanable tempest that threatens the profitability of each but the astir cost-efficient mines.

“The economics are unspeakable today,” says Charles Chong, VP of strategy astatine the crypto advisory steadfast BlockSpaceForce and erstwhile manager of strategy astatine the bitcoin mining institution Foundry. “If I bargain a bitcoin mining instrumentality today, I don’t cognize if I tin marque the wealth back.”