Bitcoin Neglected: Miners Migrate To AI

Bitcoin, once the undisputed king of mining, now seems to be at a crucial crossroads. While the network shows record performance, a new trend is emerging: miners, facing declining profitability, are turning to artificial intelligence (AI) to diversify their revenue streams.

Bitcoin: record power, but declining profits

In recent months, the Bitcoin network has seen its hash rate reach an all-time high, marking the collective power of the machines dedicated to mining. This peak reflects the continued enthusiasm for securing the network, despite the economic challenges that cloud miners’ daily lives.

Indeed, as the hash rate is directly tied to the network’s security, this surge is an encouraging sign for cryptocurrency supporters.

However, behind this façade of raw power lies a more complex economic reality. Mining, once seen as a financial windfall, is now less lucrative.

Revenue per exahash, a key profitability indicator for miners, dropped by nearly 12% last August, according to Jefferies Bank.

This decline is mainly due to increased competition among miners and the gradual reduction of rewards, a classic effect after the Bitcoin halving in April.

With ever-higher operating costs and plummeting revenues, miners are forced to seek alternatives.

Several companies, including Core Scientific, have begun redirecting their computing power towards new technological avenues, primarily AI. This transition proves to be not only a response to the profitability crisis but also an opportunity to keep their infrastructures active.

AI: a solution for an uncertain future

Core Scientific is the emblematic example of this migration to AI. Emerging from bankruptcy last January, this mining giant has managed to transform its strategy by leveraging its infrastructures to venture into high-performance computing (HPC) and AI.

This shift, although surprising, quickly won over Wall Street, contributing to a significant increase in the company’s market valuation. Thanks to a major agreement with CoreWeave, Core Scientific is now at the forefront of powering AI models that are hungry for computing power.

Why this pivot to AI? Simply because artificial intelligence is booming and promises far more stable returns on investment than Bitcoin mining.

With powerful GPUs and a robust computing infrastructure, Core Scientific and other miners have a major competitive advantage in a market where the demand for computing power is exploding.

AI requires colossal processing capacity for machine learning and data analysis algorithms, making it a natural alternative for miners equipped with cutting-edge hardware.

By diversifying their activities, these companies are not only seeking to survive but to strategically position themselves in a burgeoning sector. The high-performance computing and AI market is becoming a very lucrative niche, far more stable than Bitcoin, which is subject to severe and unpredictable fluctuations.

The transition: a new era for data centers

The adaptation of Bitcoin miners to AI is not limited to a simple reallocation of resources. It is a real transformation of infrastructures that is taking shape. Data centers, once exclusively dedicated to mining, are evolving to become versatile hubs capable of meeting the growing needs of the technology sector. The ability of these centers to process massive volumes of data makes them preferred partners for AI companies.

Core Scientific CEO, Adam Sullivan, points out that this transition is just the beginning of a new era. According to him, the data center market is being reconfigured, and Bitcoin miners could well become the leaders of this industry.

With a capacity of 700 megawatts dedicated to AI and high-performance computing, Core Scientific could become the third-largest data center company listed in the United States in the coming years.

This strategic repositioning opens up dizzying prospects for Bitcoin miners. Rather than disappearing in the face of plummeting profits, they are adapting and reinventing themselves. The mining industry is thus evolving towards a hybrid model, where cryptocurrency exploitation coexists with cutting-edge technological activities, reshaping the contours of decentralized finance and large-scale technology.