Miners have approximately nine months to secure advantageous deals with major cloud providers and AI firms for data center services and high-performance computing. This perspective was shared by JPMorgan analysts, as reported by The Block.
“[…] Some miners have about nine months to sign lucrative deals with several well-funded hyperscalers/AI startups, while data center applications remain pending, awaiting approval and network connections,” noted Reginald Smith and Charles Pearce in a new report.
The document highlights the potential of miners as hosting centers for artificial intelligence. However, the pool of potential partners is small, mainly consisting of large cloud providers and well-funded AI startups. The direction requires significant investment. For instance, a 100 MW facility powered by the latest generation of graphics processors would cost approximately $3 billion.
Experts note that miners could benefit from the growing demand for computing, as they already possess much of the necessary infrastructure.
Avoiding Overreach
Fred Thiel, CEO of mining firm MARA (formerly Marathon Digital), told Bernstein analysts that the current AI environment resembles the internet boom of the early 2000s. Many companies, especially smaller players, risk overbuilding infrastructure without sufficient demand.
“This could lead to potential financial difficulties if clients fail to generate revenues,” noted Gautam Chhugani, head of digital assets at a brokerage firm.
Thiel acknowledged the advantages of the new niche, suggesting that successful bitcoin miners will increasingly integrate AI into their operations, utilizing cheap energy and becoming “energy partners” for data centers of major cloud providers.
Miners’ strategies in 2024 have diverged: some focus solely on bitcoin mining, while others diversify amid the AI boom. The latter’s stocks significantly outperform the former, although their hash rate grows more slowly.
Previously, experts noted that miners are attractive partners for creating AI data centers due to their access to power sources and operational capabilities.
Artificial intelligence offers 17-25 times more revenue per kWh compared to bitcoin mining — $0.17-0.2 versus $3-5.