As the demand for artificial intelligence (AI) technology continues to surge, bitcoin miners are seizing the opportunity to expand their operations beyond crypto mining. In a bid to secure additional revenue streams, these companies are investing millions into retrofitting their existing facilities to cater to the computing needs of AI businesses. The potential rewards from this strategic move could amount to billions of dollars in the long run.
According to a recent report, Core Scientific, a leading bitcoin mining company, has announced a significant deal with cloud provider CoreWeave. This 12-year partnership is expected to generate over $3.5 billion in revenue for Core Scientific by providing infrastructure for AI-related applications such as machine learning. CoreWeave, backed by tech giant Nvidia, rents out graphics processing units (GPUs), which are essential for training and running AI models.
Core Scientific’s CEO, Adam Sullivan, explained that bitcoin mining facilities are essentially “power shells” to the data center industry, making them well-suited for AI operations. The company has been diversifying into other services since 2019, recognizing the potential of the AI market.
The demand for AI compute and infrastructure skyrocketed after OpenAI unveiled ChatGPT in November 2022, triggering a rush of investment in AI models and startups. Consequently, other bitcoin miners like Bit Digital, Hive, Hut 8, and TeraWulf have also been retrofitting their massive facilities to meet the needs of the AI market.
James Butterfill, the head of research at digital asset firm CoinShares, highlighted the overlap between bitcoin mining and AI operations, leading to competition for rack space. While AI operations require higher capital expenditure, they are more profitable than bitcoin mining, according to CoinShares’ report.
Companies like Bit Digital, Hut 8, and Hive are already generating a significant portion of their revenue from AI services, with Bit Digital deriving 27% of its revenue from AI.
However, pivoting to AI is not as straightforward as repurposing existing infrastructure and machines. High-performance computing (HPC) data center requirements differ from those of bitcoin mining, necessitating substantial investments in new infrastructure.
Despite the challenges, bitcoin miners are actively exploring the opportunities presented by the AI market. Clean energy sources, such as nuclear power, are being considered to meet the immense energy demands of AI workloads.
As the article highlights, the information was obtained from a CNBC news report published on Monday, June 3, 2024 by MacKenzie Sigalos. The rewrite aims to simplify the content and ensure that it does not constitute plagiarism while providing proper credit to the original source. You can check out the full article here.
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