Bitcoin Miners Shift Focus to AI as Bear Market Continues
Seven of the top ten miners by hash rate are now generating revenue from AI or high-performance computing initiatives, with the remaining three planning to follow suit. This pivot is redefining mining economics and investor focus, as miners seek to diversify their revenue streams and reduce their reliance on cryptocurrency prices.
The shift towards AI is driven by the need for miners to remain profitable in a bear market. By leveraging their existing infrastructure and expertise, miners can offer high-performance computing services to clients, generating a new revenue stream. This approach also allows miners to reduce their energy consumption and mitigate the risks associated with cryptocurrency price volatility.
AI Partnerships and Revenue Models
TeraWulf has set a benchmark for the industry by signing two 10-year hosting deals with Fluidstack, totaling approximately 200 MW at Lake Mariner. The contract implies total revenue of about $1.85 million per MW per year over the term, which many miners now use as a benchmark when promoting AI tenants. Other miners, such as Core Scientific and Bitdeer, are also expanding their AI and HPC capabilities, with Core Scientific adding 70 MW of additional HPC capacity and Bitdeer operating a commercial AI cloud based on NVIDIA DGX systems.
Marathon Digital Holdings has acquired 64% of Exaion, an EDF subsidiary, to expand its global AI and HPC capabilities, with an option to increase its stake to 75% by 2027. CleanSpark has secured 271 acres and about 285 MW of power long-term in Texas for a next-generation AI and HPC campus. Riot is exploring converting approximately 600 MW at Corsicana to AI or HPC and has paused part of its mining expansion, resulting in a reduction in its year-end 2025 hashrate forecast.
Economic Rationale and Investor Focus
The economic rationale for this shift is clear. Using today’s network context, a MW of modern ASICs at about 17 J/TH corresponds to a hashrate of about 0.059 EH/s, generating approximately $1.0 million to $1.6 million per MW per year in gross mining revenue before electricity and operating costs. In contrast, the contractual nature of AI hosting provides a more stable cash flow, with the midpoint of this range being less than the $1.85 million per MW per year provided for in TeraWulf’s AI contracts.
Investors are taking notice of this shift, with a growing focus on the composition of earnings rather than just the exahash. The contracted AI megawatts and dollars per MW per year are becoming key metrics to track, with the range of $1.5 million to $2.0 million per MW per year emerging as a practical benchmark for high-density hosting in the US.
Industry Implications and Future Outlook
The implications of this shift are significant, with the potential to slow the rate at which the network hashrate grows until 2026 if significant portions of the new power are directed to GPUs instead of ASICs. However, this does not mean that capital will not continue to flow into mining, as high Bitcoin prices and fee spikes can still improve returns.
As the industry continues to evolve, it is essential to track key metrics such as AI contracted megawatts, dollars per MW per year, utility investment histories, and ERCOT load revisions. By monitoring these data points, investors and industry observers can gain a deeper understanding of the shift towards AI and its impact on the mining industry.
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