Strategic Alliances in AI and Bitcoin Mining

In recent developments, Bitcoin miners are increasingly aligning with the artificial intelligence (AI) sector to leverage their robust power supplies and advanced operational capabilities. Core Scientific’s 12-year agreement with AI cloud provider CoreWeave and Coatue Management’s $150 million investment in Hut 8 highlight this growing synergy. Brokerage firm Bernstein has given outperform ratings to Iris Energy and Core Scientific, citing their potential in AI applications.
Bitcoin miners currently control around 6 gigawatts (GW) of power, projected to rise to 12 GW by 2027. This significant power capacity positions them advantageously for AI data centers, which require high power density and robust cooling systems. Bernstein predicts that by 2027, about 20% of Bitcoin miners’ power capacity will be used for AI purposes.
The largest U.S. Bitcoin miners are expected to consolidate further, potentially controlling 25% of the global Bitcoin hashrate, enhancing their ability to explore AI opportunities. Bernstein forecasts a bullish future for Bitcoin, predicting its price to reach $200,000 by 2025, $500,000 by 2029, and over $1 million by 2033.
However, Bitcoin miners face challenges, especially during market downturns. The current phase of “capitulation” has seen miners reducing operations or selling Bitcoin reserves due to decreased earnings. The hashrate recently fell by 7.7% to a four-month low, indicating potential market difficulties. Miners have also experienced significant financial strain, with daily revenues dropping by 63% since the last Bitcoin halving.
Bitcoin miners are at a critical juncture, balancing the potential of AI data center partnerships with financial pressures from a volatile market. The integration of AI and Bitcoin mining could drive future growth, but miners must navigate current challenges to fully realize these opportunities.