Investor Interest in Bitcoin Miners Pivoting to AI

Analysts at Bernstein highlight significant investor interest in bitcoin miners shifting their focus toward the artificial intelligence (AI) and high-performance computing (HPC) data center market.

“We are seeing significant investor interest in bitcoin miners pursuing AI/HPC, and the same investors are questioning if all miners should pivot to AI,” noted Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia in a report to clients on Monday.

This operational shift is often referred to as the “Mullet” strategy: AI data centers at the forefront and bitcoin mining in the background. The report indicated that the current mining landscape reflects a near-even split between miners focused on bitcoin mining and those transitioning to AI data centers.

Transitioning to this strategy may involve miners incorporating AI-specific machines with GPUs into their operations since ASIC mining machines are not suitable for AI training tasks.

Challenges in Transitioning to the AI Data Center Market

Despite the potential, Bernstein identified specific challenges for miners shifting their operations toward AI data centers. While bitcoin mining and AI data centers share similarities in power capacity and high-density power specifications, they operate under fundamentally different business models.

Analysts state, “Bitcoin miners pursue a proprietary strategy of self-mining, converting power to bitcoin at a lower cost than the market price. Therefore, the focus must be on growing bitcoin production/hash rate and maintaining a treasury strategy that avoids selling bitcoin at a loss.” The report concluded that leading bitcoin miners should concentrate on growing their market share in bitcoin mining, increasing their hash rate faster than the total market, and refraining from losses on bitcoin sales.