Miners are getting creative

Many crypto miners are now exploring the conversion of their existing facilities to meet AI needs. The energy-intensive process of mining validates blockchain transactions using specialized computers. An April update to Bitcoin's blockchain software, which halved mining rewards, has made the transition to data centres even more appealing. Morgan Stanley's analysis indicates that a quickly convertible data centre is significantly more valuable than its mining facility counterpart. The firm identified over seven gigawatts of potential retrofit sites among the top 21 public crypto-mining companies, which currently contribute about a quarter of Bitcoin's mining power.

Some crypto miners, including Northern Data AG, Bit Digital Inc., Iris Energy, Hive Digital Technologies Ltd., and Hut 8 Corp., are directly purchasing specialized hardware to sell computing power to AI clients. These companies have invested heavily in Nvidia chips, which are in high demand by data-centre hyperscalers like Google and Amazon. These firms, with experience in running GPU-based mining operations alongside Bitcoin mining, are well-suited for high-performance computing. They often have established relationships with Nvidia or its wholesalers, having been significant GPU purchasers during previous crypto bull runs.

The AI boom has brought unprecedented growth to the data centre business, a sector traditionally viewed as a quiet corner of the tech industry. This transformation has attracted the attention of major players from Silicon Valley to Wall Street. As AI continues to expand, the intersection between AI companies and crypto miners is likely to deepen, experts believe.