tl;dr
Bitcoin miners are exploring the shift to AI data centers for increased profitability. The move comes as a response to reduced mining rewards and a sluggish crypto market. Miners are leveraging their expertise in running data centers to meet the demand for AI compute power. However, they face challe...
Bitcoin miners are exploring the shift to AI data centers for increased profitability. The move comes as a response to reduced mining rewards and a sluggish crypto market. Miners are leveraging their expertise in running data centers to meet the demand for AI compute power.
However, they face challenges in adapting infrastructure and addressing the higher operational costs of AI data centers compared to traditional Bitcoin mining facilities. The transition involves complexities such as managing continuous operations, infrastructure requirements, and increased costs.
At the Mining Disrupt conference in Fort Lauderdale, Florida this week, leading miners said navigating the shift to AI requires skill and care. “In the long-term, is a big trend,” Paul Li, CEO of mining technology provider Fog Hashing, said during a talk. “We cannot miss that. You need to go far this year, as the demand for compute power AI compute is huge.”
In recent months, following the last halving which cut mining rewards in half, and amid a crypto markets slump, Bitcoin miners have been trying to slim down their costs. Bitcoin miners had already been eyeing AI for some time. Both industries use huge amounts of energy—and are constantly on the prowl to get it cheap.
When Bitcoin’s price falls and minting new digital coins isn’t generating enough revenue, some miners have pivoted their infrastructure to address AI demand. As they are familiar with running data centers, they can be faster and more efficient than other facilities serving AI. “It’s similar to mining to a degree,” Hiveon Energy boss Andrii Garanin told Decrypt. “A data center is a data center.”
Finding staff is easy as well—the industry has been around for a long-time while Bitcoin mining is new—although there are headwinds, miners say. “In terms of infrastructure, it’s completely different,” Shanon Squires from Compass Mining told Decrypt. “A Bitcoin mining farm is like a chicken coop compared to a tier three data center—it’s not even close,” he continued, noting that the set-up was more complex, with heating, ventilation, and air conditioning essential for setting up an operation.
Bitcoin miners may sometimes turn off, when they want to relieve pressure on the power grid. Shutting down operations temporarily doesn’t matter, because the network is decentralized. But this is a no-go when running an AI data center, said Squires. “We’re interruptible, whereas a traditional data center needs (to be) on 100% of the time,” he said, adding that this ups costs big time.