Cryptocurrency Miners Forge Deals with AI Developers to Boost Revenues
Cryptocurrency miners are finding new ways to boost their revenues by striking deals with AI developers, according to a report by the Financial Times. These miners, who operate powerful computing sites, have been facing challenges in turning a profit due to high energy costs and reduced rewards for mining.
To capitalize on the increasing demand for graphics processing units (GPUs) used in both cryptocurrency mining and AI processing, miners are now seeking partnerships with AI developers. Core Scientific, one of the world’s largest bitcoin miners, is leading the charge in this new trend. CEO Adam Sullivan stated that AI deals are becoming an essential part of their business strategy.
Recently, Core Scientific reached a lucrative agreement with AI cloud provider CoreWeave, with projected revenues of $4.7 billion over 12 years. CoreWeave, a former crypto miner that transitioned to AI, saw its valuation soar to $19 billion after raising $7.5 billion in debt financing in May.
The report highlights that AI firms require significant energy and computing infrastructure, which crypto miners can provide. This presents a more attractive option for AI companies compared to building their own high-performance computing data centers. However, big tech companies like Google and Microsoft are also investing heavily in AI data centers.
Analysts from J.P. Morgan noted that it typically takes 3-5 years to build an HPC-grade data center from scratch, a timeline that has been extended due to the surging demand for AI. The Energy Information Agency (EIA) estimated that large-scale cryptocurrency operations in the U.S. consume over 2% of the country’s electricity, equivalent to adding another state to the power grid.
The International Energy Agency (IEA) projected a significant increase in global energy consumption from data centers, crypto, and AI in the coming years. By 2026, this demand could double, representing nearly 2% of the world’s energy usage and rivaling Japan’s electricity consumption.
The convergence of cryptocurrency mining and AI development signifies a new era of collaboration between two rapidly evolving industries. As miners seek to diversify their revenue streams and AI developers require robust computing infrastructure, these partnerships could shape the future of both sectors.
