Bitcoin Miners Could Earn $14 Billion Annually from AI by 2027

Bitcoin miners could earn an additional $14 billion annually by 2027, not solely from mining Bitcoin but by supplying energy to the rapidly growing AI and high-performance computing (HPC) sectors. 

VanEck, a financial firm, suggests that Bitcoin miners’ current infrastructure could be a goldmine for the energy-intensive needs of AI companies.

Bitcoin miners hold a crucial advantage

AI companies urgently need power, with demand soaring as technological advancements accelerate. While new data centres are crucial for meeting this demand, building them takes several years. Bitcoin miners, however, have an existing infrastructure that could be repurposed to meet these energy needs within a much shorter timeframe, giving them a significant advantage.

This opportunity is especially critical as Bitcoin mining and AI development strain the North American power grid, causing new power grid connections to be delayed. Companies like Core Scientific are already capitalizing on this trend. Core Scientific has secured a 12-year agreement with AI giant CoreWeave to supply 200 MW of power, which is expected to generate over $3.5 billion. As the deal expands, Core Scientific could become a leading data centre operator in the United States, driven by its energy assets initially intended for Bitcoin mining.

A lucrative transition

Transitioning from Bitcoin mining to supplying energy for AI could be highly profitable. According to VanEck’s analysis, if Bitcoin miners divert just 20% of their energy resources to AI and HPC by 2027, they could see an annual revenue boost of nearly $14 billion. This estimate assumes that each megawatt of power could generate approximately $9.11 million in revenue annually.

However, this transition is challenging. The capital expenses for retrofitting mining infrastructure to meet AI demands are substantial. VanEck estimates upgrading the infrastructure could cost around $7.5 million per MW. Additionally, the cost of GPUs required for AI tasks, such as Nvidia’s H100, could reach up to $54.7 billion. These GPUs must also be replaced every four years, adding to the overall investment.

AI companies ready to invest

AI companies are willing to bear much of the financial burden despite the high costs. They are expected to provide the majority of the capital needed to retrofit Bitcoin mining sites, significantly reducing the financial risk for miners. This willingness to invest highlights the crucial role Bitcoin miners could play in the AI sector.

While this opportunity presents a promising future for Bitcoin miners, there are potential obstacles. Many Bitcoin mining companies have faced financial difficulties, including high debt levels and excessive share issuance. However, shifting to AI could be a transformative opportunity for these miners. If executed correctly, it could double the value of some Bitcoin mining stocks. Companies like CORZ and Terawulf (WULF) are already making strides in the AI sector and outperforming others in the industry, demonstrating the potential for substantial gains.

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