Bitcoin Miners Investing in AI Businesses for Growth

The TDR Three Key Takeaways regarding Bitcoin Miners Investing in AI Businesses for Growth:

1. Bitcoin miners repurpose infrastructure to AI for new revenue streams.
2. Core Scientific signs a 12-year AI services deal with CoreWeave.
3. Core Scientific CEO Adam Sullivan said “The best way to think about Bitcoin mining facilities is that we are essentially power shells to the data center industry,” 

Bitcoin miners are increasingly investing millions into artificial intelligence (AI) ventures seeking new revenue streams. Companies like Core Scientific (NASDAQ: CORZ) and Hut 8 (TSE: HUT) are diversifying by repurposing their existing infrastructure for AI, which requires significant capital but offers potentially higher returns. Core Scientific, for instance, has signed a major deal with cloud provider CoreWeave, expecting to generate revenue from AI services. This pivot to AI involves converting data centers to high-performance computing (HPC) facilities.

Bitcoin miners, often stationed in energy-secure and energy-intensive data centers, are finding these facilities ideal for AI operations as well. James Butterfill, head of research at digital asset firm CoinShares, highlighted the synergy between bitcoin mining and AI: “Bitcoin miners, often stationed in energy-secure and energy-intensive data centers, find these facilities ideal for AI operations as well.”

Core Scientific’s last Monday agreement with CoreWeave is a testament to this strategic shift. Core Scientific announced a 12-year agreement with cloud provider CoreWeave to provide infrastructure for applications such as machine learning. This agreement, which builds on an existing partnership between the two companies, is expected to generate over $3.5 billion in revenue during the contract period. Following this announcement, Core Scientific shares increased by approximately 30% on last Tuesday morning. 

The deal involves CoreWeave, backed by Nvidia, renting out GPUs for AI model training and operation. Valued at $19 billion last month, CoreWeave will receive about 200 megawatts of infrastructure from Core Scientific. The demand for high-performance computing (HPC) required for AI tasks is growing, and Bitcoin miners are well-positioned to capitalize on this trend. “The best way to think about bitcoin mining facilities is that we are essentially power shells to the data center industry,” Core Scientific CEO Adam Sullivan told CNBC.

Hut 8, another prominent Bitcoin miner, is following a similar path. The company is investing heavily in AI capabilities, leveraging its extensive data center infrastructure. This diversification strategy is seen as a way to ensure long-term sustainability and profitability. By integrating AI, these companies can generate new revenue streams that are less dependent on the price of Bitcoin.

The integration of AI by Bitcoin miners like Core Scientific and Hut 8 represents a significant industry shift, providing new revenue streams and meeting the growing demand for high-performance computing. This adaptation could offer new growth opportunities and stability in the unpredictable market. Want to be updated on all things Psychedelic, Cannabis, AI, and Crypto? Subscribe to our Daily Baked in Newsletter!