Bitcoin, once the undisputed king of mining, now appears to be at a crucial crossroads. While the network is posting record performance, a new trend is emerging: miners, faced with declining profitability, are turning to artificial intelligence (AI) to diversify their revenue streams.
Bitcoin: record power, but profits down
In recent months, the Bitcoin network has seen its hash rate reach an all-time high, marking the collective power of mining machines. This spike is a testament to the continued enthusiasm for securing the network, despite the economic challenges that darken the daily lives of miners.
Indeed, since hash rate is directly linked to network 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 indicator of profitability for miners, fell nearly 12% last August, according to bank Jefferies.
This decline is explained in particular by increased competition between miners and the gradual reduction of rewards, a classic effect after the Bitcoin halving in April.
With ever-rising operating costs and plummeting revenues, miners are being forced to look for alternatives.
Several companies, including Core Scientific, have thus begun to redirect their computing power towards new technological avenues, AI in the lead. This transition turns out not only to be a response to the profitability crisis, but also an opportunity to keep their infrastructures in operation.
AI: A Solution for an Uncertain Future
Core Scientific is the emblematic example of this migration towards AI. Emerging from bankruptcy last January, this mining giant has been able to transform its strategy by exploiting its infrastructures to launch into high-performance computing (HPC) and AI.
The move, while surprising, quickly caught the attention of Wall Street, contributing to a significant increase in the company's stock market valuation. Thanks to a major deal with CoreWeave, Core Scientific is now at the forefront of powering computationally intensive AI models.
Why this pivot to AI? Simply because artificial intelligence is booming and promises much more stable returns on investment than Bitcoin mining.
With powerful GPUs and robust computing infrastructure, Core Scientific and other miners have a major competitive advantage in a market where demand for computing power is exploding.
AI requires colossal processing power for machine learning and data analysis algorithms, making it a natural fit for miners equipped with cutting-edge hardware.
By diversifying their activities, these companies are not only looking to survive, but to position themselves strategically in a booming sector. The high-performance computing and AI market is becoming a very lucrative niche, much more stable than that of Bitcoin, subject to brutal and unpredictable fluctuations.
The Transition: A New Era for Data Centers
Bitcoin miners' adaptation to AI is not just a matter of reallocation of resources. It is a real transformation of infrastructure that is taking shape.
Data centers, once dedicated exclusively to mining, are evolving into multipurpose hubs capable of meeting the growing needs of the technology sector. The ability of these centers to process massive volumes of data makes them partners of choice for AI companies.
Core Scientific CEO, Adam Sullivan, underlines that this transition is just the beginning of a new era. According to him, the data center market is in full reconfiguration, and Bitcoin miners could well become the leaders of this industry.
With 700 megawatts of capacity dedicated to AI and high-performance computing, Core Scientific could become the third-largest listed data center company 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 falling profits, they are adapting and reinventing themselves. Meanwhile, China is preparing a $1.4 trillion shock.
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