Bitcoin Miners Embrace AI as Mining Revenues Tank 50% in May

Bitcoin Miners Embrace AI as Mining Revenues Tank 50% in May

Bitcoin miners are increasingly turning to artificial intelligence (AI) for additional revenue streams. On Monday, Core Scientific signed a 12-year deal with cloud AI firm CoreWeave to host the company’s high-performance computing (HPC) operations.

This partnership builds on a previous agreement from 2019 between Core Scientific and the Nvidia-backed AI company. Under this arrangement, the miner will provide 200 megawatts to host CoreWeave HPC operations in its data centers.

Core Scientific CEO Adam Sullivan stated that the agreement allows the company to diversify its business and meet the growing demand for energy-intensive data centers. This move is particularly significant for the miner, which recently emerged from bankruptcy and is projected to generate up to $3.5 billion throughout the contract. CoreWeave will pay for upgrades to the data centers, enabling them to host GPUs, which is expected to cost $300 million. It also has the option to increase its hosting footprint with the miner.

Sullivan said, “Our expanding relationship with CoreWeave creates a pathway for Core Scientific to diversify our business model and balance our portfolio between Bitcoin mining and alternative compute hosting, positioning us to maximize cash flow and minimize risk while maintaining our significant exposure to Bitcoin’s upside potential.”

Market analysts believe this deal sets a precedent for other miners, as AI and BTC mining require energy-intensive infrastructures. James Butterfill, head of research at CoinShares, reportedly noted that incorporating AI operations can improve miners’ profit margins because their data centers are well-suited for AI technology.

Already, several miners—including BitDigital, Hive, and Hut8—have begun incorporating AI operations into their facilities and have started to generate returns for their services.

Bitcoin miners’ shift towards AI comes amid declining revenues. Despite an initial surge in earnings following the introduction of the Runes protocol, available data shows a significant drop due to decreased network activity and the impact of Bitcoin’s halving event. The halving event decreased mining rewards to 3.125 BTC from 6.25 BTC on April 20.

Zero Hedge reported that Bitcoin miner revenues were down 50.1% in May, while the volume of BTC sent to exchanges rose by 20.9%. According to Glassnode, this transaction increase has pushed miners’ BTC balances to a new low of 1.8 million BTC—the lowest since 2021.

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