cnbc.com Houston-based tech company Lancium and Denver-based Crusoe Energy Systems announced on Thursday morning a multibillion-dollar deal to build a 200-megawatt data center just outside Abilene, Texas, that is designed to “meet the unique needs of AI companies.” It is the first phase of a larger 1.2-gigawatt build-out. At full capacity, Lancium President Ali Fenn tells CNBC that this will be one of the largest artificial intelligence data center campuses in the world, in the latest example that the race to power AI — and leave bitcoin mining behind — is accelerating. Bitcoin miners pivot to AI There are a lot of synergies between the bitcoin mining and AI infrastructure businesses. Mining firms have expansive data centers, with access to fiber lines and large amounts of power across the U.S. They’re exactly the types of facilities needed for compute-intensive AI operations, which means their sites and technology are in high demand. Meanwhile, miners need to diversify. Following the bitcoin halving in April, an event that happens about once every four years, the business of generating new tokens has become much less profitable. JPMorgan Chase analysts wrote in a report in June that “some operators are feeling the financial pinch from the recent block reward halving, which cut industry revenues in half, and are actively exploring exit strategies.” With the burgeoning AI industry in need of capacity and bitcoin miners in search of new ways to generate returns on their hefty investments, mergers, financings and partnerships are rapidly coming together. Lancium and Crusoe join a long list of miners looking to trade bitcoin for artificial intelligence, and so far, the strategy appears to be working. The combined market capitalization of the 14 major U.S.-listed bitcoin miners tracked by JPMorgan hit a record high of $22.8 billion on June 15 — adding $4.4 billion in just two weeks, according to a June 17 research note from the bank. Bit Digital, a bitcoin miner that now derives an estimated 27% of its revenue from AI, said in June that it had entered into an agreement with a customer to supply Nvidia GPUs over three years at a data center in Iceland, in a deal that is expected to generate $92 million in annual revenue. It’s paying for the general processing units, in part, by liquidating some of its crypto holdings. Hut 8, based in Miami, said it raised $150 million in debt from private equity firm Coatue to help it build out its data center portfolio for AI. Hut 8 CEO Asher Genoot recently told CNBC his company “finalized commercial agreements for our new AI vertical under a GPU-as-a-service model, including a customer agreement which provides for fixed infrastructure payments plus revenue sharing.” The pivot to AI has been going especially well for Core Scientific, which emerged from bankruptcy in January. On Tuesday, B. Riley upgraded its stock to buy from neutral and raised its price target on the shares to $13 from 50 cents, citing the company’s recent spate of deals with CoreWeave, an Nvidia-backed startup that’s one of the main providers of the chipmaker’s technology for running AI models. Last month, CoreWeave offered to buy Core Scientific for $1.02 billion, not long after the pair announced an expansion of their existing partnership. Core Scientific rejected the bid. The company is currently worth about $2 billion.
Runes fell apart, but AI now is the story to save the day... it will last (for a while). But shit's going to get interesting when this AI thing pops. We already have numerous companies getting loans for data-centers that can't possibly be built and running in the time-frame they claim will happen... many of them DO NOT even have a contract yet with any clients. But are literally 'banking' on everything turning out ok, AND getting a lucrative contract with a client (that doesn't even exist yet). More companies are jumping into the pan now and BOOKING future PROFITS to get capital for TODAY. I saw how well this worked with Enron and the dot-com bubble. But these things keep reoccurring in cycles every so many years. Here we go again! Come what may, enjoy the show because the pot-stocks thing wasn't quite deadly when it popped as this one will be. Fun day for miners though:
Did you bash your head and come back as Stoney? Albeit he doesn't start new threads... but if he did... it would be titled like that.
I would think the AI bubble bursting will be amazing for a few miners while most go under. The over capacity of GPU compute we are building out is like nothing ever before. It is really no different if you had massive over capacity in mining equipment for copper or anything else that is mined. That situation is good for a small amount of companies that can consolidate the industry during a bear market while their competition goes out of business. They come out the other side with a huge upgrade to property , plant and equipment on the cheap at the same time they have less competition than before. I have no idea how to benefit from this myself though as I would most likely end up picking one of the losers when it comes to crypto mining so won't bother playing with the abundance of AI inflated junk tech companies to short.