Why So Many Bitcoin Mining Companies Are Pivoting to AI

A worker installs a new row of Bitcoin mining machines at the Whinstone U.S. Bitcoin mining facility in Rockdale, Texas.

The AI boom has led to an enormous demand for energy, and Bitcoin mining companies are capitalizing on this trend. In recent months, major Bitcoin mining companies have started to swap out some of their mining equipment in favor of rigs used to run and train AI systems. These companies believe that AI training could provide a safer and more consistent source of revenue than the volatile crypto industry.

“If you go back five or 10 years, 80% of the data center loads were located in six or seven primary markets,” says Nazar Khan, the COO and CTO of the bitcoin mining company Terawulf. “Those markets are filled up, and a couple of them have already issued moratoriums on further data center construction. So those data center loads are now looking for new homes.”

Bitcoin miners face headwinds, including the recent halving of Bitcoin rewards, which has slashed miners’ rewards in half. This has forced some miners to seek ways to diversify their business models, with AI training at the top of the list.

The partnership between the AI and Bitcoin mining industries is a logical one, given the needs from both sides. AI companies need the space, access to cheap energy, and infrastructure that Bitcoin miners already have. And Bitcoin miners seek the stability of AI compute revenue, and the enormous potential profits flowing from the current AI hype cycle.

AI companies are racing to train and run their own models in the hopes of outpacing OpenAI’s flagship model.

Some Bitcoin mining companies are leasing their space to AI clients. In June, Core Scientific, which recently emerged out of bankruptcy stemming from the 2022 crypto crash, announced it would host over 200 megawatts of GPUs (graphic processing units, which power AI training and operation) for the AI startup CoreWeave.

This increase in demand has climate repercussions. Data centers use 10 to 50 times the energy of a typical commercial office building, the U.S. Department of Energy says. A recent Goldman Sachs report predicted that data centers will use 8% of total U.S. power by 2030, up from 3% in 2022.

Some Bitcoin companies, like Terawulf, say they’re focused on using green energy.

All of this activity is concerning climate activists. “Bitcoin miners are diversifying into traditional data centers and AI—and obviously they use different machines, but they still use voracious amounts of energy,” says Mandy DeRoche, a deputy managing attorney at Earthjustice’s clean energy program. “That tremendous increase in energy demand has consequences for the grid, for the cost of electricity, and the climate.”