The Allure of AI Over Bitcoin

The pivot comes at a pivotal moment for Bitcoin miners. After the cryptocurrency’s fourth halving event in April 2024 slashed mining rewards by half—from 6.25 BTC to 3.125 BTC per block—profit margins have tightened amid volatile BTC prices and soaring electricity costs. Bitcoin, which peaked above $73,000 earlier this year before settling around $95,000 as of mid-December 2025, no longer offers the same reliable revenue streams it once did.

“The economics have changed,” said Adam Wright, CEO of Core Scientific, in a recent earnings call. “AI hyperscalers are willing to pay premiums for the power-dense infrastructure we’ve built over years of mining.” Core Scientific, one of the largest publicly traded miners, announced a landmark 200-megawatt (MW) deal with AI cloud provider CoreWeave in June 2024, followed by expansions that now total over 500 MW in committed capacity. This partnership alone is projected to generate $3.5 billion in revenue over 12 years, dwarfing traditional mining income.

Hut 8, another Canadian-based miner, has similarly transformed. In October 2025, it inked a $500 million hosting agreement with an undisclosed AI firm, converting 32,000 Nvidia H100 GPUs into AI training clusters. Iris Energy, listed on NASDAQ, revealed plans to allocate 75% of its 510 MW Denton, Texas facility to AI by Q1 2026, citing AI workloads’ superior profitability—up to 5x higher than Bitcoin mining during low-crypto-price periods.

Infrastructure: Built for Mining, Optimized for AI

What makes miners ideal for AI? Their facilities are engineered for extreme power consumption and cooling efficiency—hallmarks of Bitcoin’s energy-intensive SHA-256 hashing. A single high-end AI GPU cluster can draw 10-20 kW, rivaling mining ASICs, but with steadier demand. Unlike crypto mining’s boom-bust cycles, AI contracts offer multi-year commitments, providing cash flow stability.

Locations matter too. Miners flocked to low-cost energy hubs like Texas, Georgia, and upstate New York, often near renewable sources or flared natural gas. These sites now attract AI firms desperate for capacity amid a global data center shortage. JLL Research estimates the U.S. will need 35 gigawatts (GW) of new data center power by 2030, with AI driving 70% of demand. Miners control about 5% of that capacity today, positioning them as key players.

“Bitcoin mining built the muscle; AI is flexing it.”

— Matt Prusak, Iris Energy CFO

Challenges and Risks in the Transition

Not all miners are making the switch seamlessly. Retrofitting requires swapping ASICs for GPUs, upgrading networking, and enhancing liquid cooling systems—costs that can exceed $10 million per MW. Smaller operators without scale or prime locations risk bankruptcy. CleanSpark, for instance, stuck to mining after deeming AI pivots too capital-intensive.

Regulatory hurdles loom large. The U.S. Federal Energy Regulatory Commission (FERC) has scrutinized miners’ grid impacts, and AI’s even higher energy draw could invite backlash. Environmental groups criticize the shift as “greenwashing,” noting AI training emits as much CO2 as five cars’ lifetimes per model. Miners counter with renewables: Core Scientific claims 98% carbon-free power, while Hut 8 partners with hydroelectric providers.

Market dynamics add uncertainty. Nvidia’s Blackwell GPUs, launching in 2026, promise efficiency gains that could depress demand for legacy H100s. Bitcoin’s potential rally—analysts eye $150,000 by 2026—might tempt some back. Yet, hybrid models are emerging: Marathon Digital holds 20% capacity for AI while mining BTC during peaks.

Broader Industry Implications

This exodus signals Bitcoin mining’s maturation. Once a speculative frenzy post-2021 bull run, the sector now boasts $20 billion in market cap for public firms. Insiders predict 30-50% of mining capacity will hybridize with AI by 2027, per Galaxy Digital research. For AI, it’s a windfall: hyperscalers like OpenAI and Anthropic gain U.S.-based compute without building from scratch.

Globally, the trend ripples. Canada’s Hut 8 eyes European expansion, while China’s banned miners seek AI footholds in the Middle East. Investors cheer: Core Scientific shares surged 400% year-to-date, outpacing Bitcoin’s 120% gain.

As CEO Wright put it, “We’re not ditching crypto; we’re evolving.” Whether this pivot sustains depends on AI’s insatiable hunger and Bitcoin’s price trajectory. For now, former miners are scripting the next chapter in the compute wars.