Crypto Miners Shift Focus to AI, Leaving Bitcoin Behind

Companies engaged in cryptocurrency mining are increasingly moving away from Bitcoin, opting instead to invest in artificial intelligence (AI) and high-performance computing (HPC). Shares of these firms have outperformed Bitcoin itself, indicating a significant pivot in the industry. As the demand for computational power grows, miners are redefining their roles and focusing on more lucrative opportunities.

Profits Shift to AI Infrastructure

Once tied closely to the fortunes of Bitcoin, these mining companies are now being recognized for their potential as technology infrastructure firms. According to John Todaro, an analyst at Needham & Co., investors are now valuing Bitcoin miners primarily for their AI and HPC opportunities. “Less than 10% of our conversations on miners focus on Bitcoin and mining,” he noted, reflecting a broader trend in the market.

This year, the performance of mining firms has been remarkable. A fund tracking listed mining companies has surged over 150% year-to-date. This contrasts sharply with the past, where miners would typically rally when Bitcoin prices increased. Instead, the current landscape shows that companies like Cipher Mining Inc. and IREN Ltd. have seen their shares climb approximately 300% and 500%, respectively, as they pivot towards AI infrastructure.

Strategic Partnerships and Investments

Cipher Mining recently signed a significant 10-year, $3 billion colocation deal with Fluidstack, a company partially backed by Google. This agreement guarantees $1.4 billion in lease obligations in exchange for a 5.4% stake in the firm. Such moves indicate a blurring of lines between crypto mining and AI computing.

In a similar vein, IREN successfully closed a $1 billion convertible notes offering, while TeraWulf Inc. announced plans to issue $3.2 billion in senior secured notes to finance the expansion of its Lake Mariner data center in Barker, New York. Additionally, Singapore-based Bitdeer Technologies Group revealed plans to convert major mining sites, including a 570-megawatt facility in Clarington, Ohio, into AI data centers. The company projects that, under optimal conditions, full conversion could yield annualized revenue exceeding $2 billion by the end of 2026.

As companies increasingly focus on AI, they adjust their Bitcoin mining activities accordingly. Following last year’s Bitcoin halving, which reduced miner rewards from 6.25 to 3.125 Bitcoin, rising network difficulty and decreasing transaction volumes have put pressure on profit margins. Even with Bitcoin approaching an all-time high of nearly $126,000 in early March 2025, these factors have made it challenging for miners to maintain profitability.

According to Wolfie Zhao, an analyst at TheMinerMag, the shift towards AI and HPC is leading firms to slow down or pause their Bitcoin hashrate expansion. “The focus is shifting from ‘how much hashrate can we add’ to ‘how efficiently can we utilize our energy footprint,’” Zhao explained. Companies like Riot Platforms Inc., IREN, and Bitfarms have already indicated they will not expand their hashrate in the near future.

As the Bitcoin hashprice hits record lows, a transition towards AI and HPC appears unavoidable. “The revenue per megawatt and EBITDA margins are far higher for HPC and AI colocation than for mining,” Todaro stated. With Bitcoin’s inherent volatility and the risks associated with halving, capital markets are rewarding AI-focused data centers with significantly higher multiples compared to traditional mining operations.

This evolving landscape highlights a significant transformation within the cryptocurrency sector as companies adapt to emerging technologies and changing market demands. As they embrace opportunities in AI, the future of cryptocurrency mining may no longer be solely tied to the fate of Bitcoin.