HomeBitcoin NewsBitcoin Miners Diversifying Into AI Expect Billions

Bitcoin Miners Diversifying Into AI Expect Billions

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Bitcoin Miners Diversifying has started its operations in other disciplines, such as machine learning and artificial intelligence (AI), to have several avenues to generate cash. This is because miner payouts have decreased from 6.25 BTC to 3.125 BTC.

Bitcoin miners like Core Scientific can handle the tremendous workloads the artificial intelligence industry requires. This market demands enormous infrastructure, a power supply to accommodate the training of AI models and massive workloads.

Core Scientific Signs 12-Year Deal With Nvidia-Backed CoreWeave

Core Scientific Signs 12-Year Deal With Nvidia-Backed CoreWeave

AI startup CoreWeave has the full support of tech giant Nvidia and private equity firms. Core Scientific and CoreWeave have struck a 12-year agreement. This agreement will bring over $3.5 billion in revenue over the contract years and prolong cooperation between the two organizations.

CoreWeave’s high-performance computing (HPC) activities will be hosted by Core Scientific, supplying approximately 200 megawatts (MW) of infrastructure by the deal’s conditions. In the second half of 2024, the Bitcoin mining company will begin modifying its locations, and in the first part of 2025, it will start operations.

“Our new contracts with CoreWeave position us to transform our hosting business and our earnings power by capturing exciting growth opportunities in artificial intelligence compute, one of the most dynamic technology segments of today,” said Adam Sullivan, chief executive officer at Core Scientific. “At the same time, we will continue to maintain our strong bitcoin mining franchise.”

Miners Seeks New Revenue Streams After Bitcoin Halving

Miners Seeks New Revenue Streams After Bitcoin Halving

Miners such as Bit Digital, Hive, Hut 8, TeraWulf, and Core Scientific, have been looking for ways to increase their revenue from various possibilities ever since Bitcoin’s halving in April, which reduced miner incentives by fifty percent. James Butterfill, the head of research at the digital asset firm CoinShares, stated that the facilities that Bitcoin miners use are perfect for artificial intelligence operations since they are located in data centers that are both energy-secure and energy-intensive.

By CoinShares, artificial intelligence accounts for 27% of Bit Digital’s total revenue. Artificial intelligence (AI) accounts for 6% of Hut 8’s revenues, while Hive, which operates data centers in Canada and Sweden, derives 4% of its revenue from similar services. Several other cryptocurrencies, including AGIX, FET, and NEAR, see price fluctuations in response to AI news. A significant increase in the value of AI coins was caused by Nvidia’s excellent performance this year.

A challenging transition to AI

A challenging transition to AI

Switching to AI isn’t as easy as utilizing previous gear and infrastructure because data network and HPC data center demands differ. “Nearly all infrastructure miners currently would require to be cut down and built from the ground up to accommodate HPC,” Needham analysts said in a May 30 analysis, except transformers, substations, and select switchgear. Bitcoin miners use ASPICs. They were designed for cryptocurrency mining solely.

Needham estimates that high-performance computing data centers cost $8–10 million per megawatt (excluding GPUs) and bitcoin mining facilities $300,000–$800,000 (without ASICs). Sullivan of Core said the two companies complement each other. Fiber lines provide ample power sources nationwide, “one of the most exciting parts about the Bitcoin mining business,” he said. Core Scientific will convert 500 MW of its nationwide bitcoin mining infrastructure into HPC data centers in three to four years, in addition to working with CoreWeave.

Business Owns

The fact that the business owns and manages its data center infrastructure makes the upgrade manageable, according to Sullivan. Even though he assured them that the necessary components could be quickly supplied. Refitting for HPC requires buying them. Needham predicts that major publicly listed Bitcoin miners will more than quadruple their power capacity. The following year to two years encompass HPC business expansion and mining.

Popular because renewable energy is generally the cheapest. Large-scale miners in low-margin businesses have an incentive to switch. World’s most affordable power source because energy is its only variable cost. According to an industry study, the Bitcoin network uses 54.5% sustainable electricity. According to the Electric Power Research Institute, data centers may use 9% of the nation’s electricity by 2030, up from 4% in 2023. Many believe nuclear power can meet that need.

TeraWulf wants to pioneer machine learning and mine using nuclear power. The corporation has designated two megawatts of HPC capacity to refocus its energy infrastructure toward AI and HPC. In a CNBC interview last year, OpenAI CEO Sam Altman strongly advocated nuclear power to fulfill AI workloads. Altman said nuclear power is necessary to get there. Maybe solar power and battery storage could get us there. However, I believe this is our objective’s safest and fastest path.

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Ali Raza
Ali Raza has been writing about blockchain and cryptocurrencies for over Three years and is now the editor-in-chief of Latestcoinsnews. After a meteoric rise in late 2016, Ali Raza's enthusiasm for Bitcoin and other cryptocurrencies skyrocketed. He can't sleep with one eye on the market because he's so fascinated by the technical and economic ramifications of cryptocurrency.

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