Bitcoin Miners Shift Focus to AI: A New Era in High-Performance Computing

The Major Shift of Bitcoin Miners Towards Artificial Intelligence

In Bitcoin mining farms, the deafening background noise remains unchanged: fans, transformers, endless rows of machines, and megawatts of electricity consumed continuously. However, what has changed is the target of this computational power. Just a few months ago, it was almost exclusively directed towards ASICs specifically designed for Bitcoin mining. Today, a growing portion of this energy is being redirected to GPU racks, colocation contracts, and clients in the field of artificial intelligence.

“Access to electricity has become the most critical bottleneck resource in the high-performance computing industry.” - TeraWulf

According to a recent report by CoinShares, the average weighted cash costs to produce a Bitcoin among publicly traded miners in the fourth quarter of 2025 were around $79,995. For many companies, this was the most challenging quarter since the halving in April 2024. The halving of the block reward from 6.25 to 3.125 BTC led to decreased revenues while costs for electricity, hardware, and financing remained high. Consequently, each mined Bitcoin yields less profit, squeezing margins, and only the most efficient miners can still operate comfortably.

Additionally, the Bitcoin price fell from $126,000 at the end of 2025 to approximately $73,400 currently. The industry has thus entered a new phase where mining no longer automatically means accumulating Bitcoin. Instead, it can become a temporary use of a potentially more valuable asset: access to power capacities and developed sites.

In this new world, the competitive advantage is no longer solely in the most efficient ASIC fleet. It is crucial to monetize existing and highly demanded infrastructure: land, power lines, transformers, substations, load management, grid connections, and operational expertise in handling extremely high energy density.

CoinShares estimates that the announced contracts in the AI and high-performance computing (HPC) sectors among publicly traded miners amount to over $70 billion. According to the report, some companies could achieve up to 70% of their revenues from AI by the end of 2026, compared to around 30% at the time of publication. For several corporations, HPC is no longer just a diversification but the most anticipated growth source in the coming years.

Core Scientific exemplifies this transformation most clearly. The company, long regarded as a pure Bitcoin miner, has entered into high-density colocation contracts with CoreWeave, which are expected to generate potential revenues of over $10 billion over twelve years and encompass around 590 megawatts of contracted power. In the first quarter of 2026, Core Scientific reported $77.5 million in colocation revenue out of total revenues of $115.2 million, with approximately two-thirds of the income now coming from AI-related activities rather than traditional mining.

Similarly, TeraWulf reported 522 megawatts of critical capacity under contract, representing over $12.8 billion in potential revenues. In the first quarter of 2026, the company achieved $21 million in HPC revenue from total revenues of $34 million. The focus has clearly shifted: the most stable, predictable, and highly valued activity in the market is no longer Bitcoin mining but the long-term leasing of infrastructure to AI clients.

Other companies are following the same path, albeit with different focuses. Hut 8 has signed a 15-year lease with Fluidstack for the River Bend site in Louisiana, covering 245 megawatts and valued at around $7 billion over the base term, with significant potential for extensions. Cipher initially secured around $3 billion in revenue with Fluidstack at the Barber Lake site over ten years, before expanding the partnership to the entire 300 megawatts of the site, raising the contracted revenue to approximately $3.8 billion.

IREN is also no longer limited to mining. CoinShares notes $17.3 million in revenue from AI cloud services in the fourth quarter of 2025, accounting for 9% of total revenue. At the same time, a GPU capacity equipped with liquid cooling of up to 200 megawatts is under construction. The stock market has already taken a position; according to CoinShares, miners with secured HPC contracts are currently valued at 12.3 times their expected twelve-month revenue, while pure Bitcoin miners only reach 5.9 times. The market thus grants AI exposure a valuation premium of over 100%.

This profound realignment, however, is costly. A mining site cannot simply be transformed into an AI data center by swapping out a few machines. Power supply and cooling must be adjusted, redundancies built, land secured, and sometimes existing facilities replaced. Most importantly, financing volumes are required that far exceed the traditional capital requirements of mining. While Bitcoin infrastructure costs about $700,000 to $1 million per megawatt, AI infrastructure costs range from $8 million to $15 million per megawatt.

The primary source of financing is therefore debt. IREN reports convertible bonds amounting to $3.7 billion. TeraWulf had a total debt of $5.8 billion after extensive financing rounds for its HPC campus. Core Scientific, on the other hand, issued secured bonds worth $3.3 billion to finance its expansion projects. The second source of financing is even more symbolic: the sale of Bitcoin holdings. CoinShares estimates that publicly traded miners have collectively reduced their reserves by more than 15,000 BTC from their peaks.

This aspect may initially seem purely financial, but it is fundamentally significant. In the previous cycle, the implicit promise of many publicly traded miners was: “We accumulate Bitcoin for our shareholders.” In 2026, the message is markedly different: “We exchange Bitcoin for infrastructure investments when they promise more attractive future cash flows.” The companies securing the network are thus not necessarily longer net buyers of Bitcoin; they may even become structural sellers, as financing AI data centers appears more attractive than expanding their mining capacities.

The most visible impact of this shift is reflected in network metrics. The Bitcoin hashrate surpassed the one zettahash mark for the first time at the end of August 2025, reaching a peak of around 1,160 EH/s in early October. However, a counter-movement set in afterward. The first quarter of 2026 brought the first decline in hashrate in a first quarter since 2020, with the network falling back to about 1 ZH/s. This decline should not be misinterpreted; a decreasing hashrate does not automatically mean Bitcoin becomes insecure. The protocol adjusts the mining difficulty accordingly. Less efficient miners drop out, the remaining operators improve their relative position, and the network continues to function.

However, the microeconomic logic of the security budget is changing. As capital, sites, and expertise increasingly shift from mining towards AI, the growth of computational power dedicated to Bitcoin will become more dependent on the Bitcoin price than before. It is no longer just a technological race but a direct competition between two uses for the same megawatt-hour.

The central question is whether this development is temporary or structural. Should Bitcoin rise again towards $100,000, the profitability of mining would significantly improve, and the incentive to reallocate capacities in favor of AI applications would decrease. However, if Bitcoin remains permanently below $80,000, more miners could accelerate their exit from the core business. Below $70,000, a capitulation scenario would become even more likely. The mining industry entered this decade as a sector primarily tasked with securing the Bitcoin network and building reserves. Today, it is increasingly evolving into a sector of infrastructure operators who can pursue two different business models depending on market prices: mining Bitcoin when it is profitable or renting computing power to AI companies when higher returns are available. Perhaps this is just a temporary phase. Perhaps a new era is already beginning.

Key Takeaways:

• Bitcoin mining is shifting towards AI and high-performance computing.
• Average cash costs for Bitcoin production among miners reached $79,995 in Q4 2025.
• Companies like Core Scientific and TeraWulf are generating significant revenue from AI-related activities.
• Financing for this transition is primarily through debt and the sale of Bitcoin holdings.
• The future of Bitcoin mining may depend heavily on the Bitcoin price and its competition with AI applications.

Sources:

• Die große Wende der Bitcoin-Miner hin zur Künstlichen Intelligenz