The New Digital Gold Rush: Crypto Miners Eye AI


A few years
ago, many publicly traded companies significantly transformed their business to
capitalize on the growing popularity of cryptocurrency mining. Now, as the
profitability of these operations becomes decidedly smaller, they are looking
for alternatives and moving towards a new boom. As a result, more miners are
beginning to offer access to substantial computing power from their data
centers to companies in the rapidly growing artificial intelligence (AI)
sector.

According
to the latest report by JPMorgan published last week, the largest mining
companies are no longer restricting themselves to mining Bitcoin (BTC) and
other cryptocurrencies. Additionally, they offer high-performance computing
(HPC) services in the AI industry. This industry is developing dynamically and
has an increasing demand for computing power.

Popular
brands in the Bitcoin mining industry, such as Riot Blockchain (RIOT) and Hive
Blockchain Technologies (HIVE), have even changed their names to emphasize the
diversification of their businesses. RIOT is now Riot Platform, and HIVE is Hive
Digital Technologies. Cryptocurrencies mined and held as reserves have served
them in recent quarters to carry out new investments and adapt to a market
increasingly driven by the AI craze.

Ethereum
(ETH) miners who used graphics processing units (GPUs) to mine this
cryptocurrency will also benefit. These rigs became useless after the Ethereum
network update and the shift from the energy-consuming mining model to the
staking model. However, now they may find a second life.

“With
the rapid growth of AI, the increased demand for high-performance computing is
now opening a new and perhaps more profitable avenue for utilizing GPUs
previously used for ether mining,” JPMorgan commented in the research.

In June,
another digital asset miner, Iris Energy, announced plans to move towards AI.
The shift to AI seems like a natural evolution, especially after a weak 2022.
Last year, the global mining industry generated $6 billion less revenue than in
the record-setting 2021.

BTC Miners Dept-to-Equity Rartio

HPC More Profitable than
Crypto Mining

The JPMorgan report suggests that if the results from the beta tests are
confirmed in reality on a larger scale, providing HPC services to the AI
industry could be much more profitable than mining Bitcoins.

“If
the profitability reported in beta tests is able to be repeated on a large
scale, it will overshadow the revenues coming from Bitcoin mining at the
moment,” the report added.

Miners are
increasingly switching from Bitcoin to HPC and changing locations for service
provision. Russia is becoming increasingly popular, having significant energy
surpluses since its aggression towards Ukraine began. Currently, the Russian
Federation offers some of the cheapest energy for companies in the digital
asset mining sector.

For
publicly listed mining companies, it could be a chance to improve results,
which have not been positive recently. Riot Platforms Inc. and Galaxy Digital
Holdings Ltd. reported negative financial results in the last quarter. Moreover,
the mining companies’ stocks have lost heavily from their 2021 peaks through low
Bitcoin prices and a growing number of hacks.

A few years
ago, many publicly traded companies significantly transformed their business to
capitalize on the growing popularity of cryptocurrency mining. Now, as the
profitability of these operations becomes decidedly smaller, they are looking
for alternatives and moving towards a new boom. As a result, more miners are
beginning to offer access to substantial computing power from their data
centers to companies in the rapidly growing artificial intelligence (AI)
sector.

According
to the latest report by JPMorgan published last week, the largest mining
companies are no longer restricting themselves to mining Bitcoin (BTC) and
other cryptocurrencies. Additionally, they offer high-performance computing
(HPC) services in the AI industry. This industry is developing dynamically and
has an increasing demand for computing power.

Popular
brands in the Bitcoin mining industry, such as Riot Blockchain (RIOT) and Hive
Blockchain Technologies (HIVE), have even changed their names to emphasize the
diversification of their businesses. RIOT is now Riot Platform, and HIVE is Hive
Digital Technologies. Cryptocurrencies mined and held as reserves have served
them in recent quarters to carry out new investments and adapt to a market
increasingly driven by the AI craze.

Ethereum
(ETH) miners who used graphics processing units (GPUs) to mine this
cryptocurrency will also benefit. These rigs became useless after the Ethereum
network update and the shift from the energy-consuming mining model to the
staking model. However, now they may find a second life.

“With
the rapid growth of AI, the increased demand for high-performance computing is
now opening a new and perhaps more profitable avenue for utilizing GPUs
previously used for ether mining,” JPMorgan commented in the research.

In June,
another digital asset miner, Iris Energy, announced plans to move towards AI.
The shift to AI seems like a natural evolution, especially after a weak 2022.
Last year, the global mining industry generated $6 billion less revenue than in
the record-setting 2021.

BTC Miners Dept-to-Equity Rartio

HPC More Profitable than
Crypto Mining

The JPMorgan report suggests that if the results from the beta tests are
confirmed in reality on a larger scale, providing HPC services to the AI
industry could be much more profitable than mining Bitcoins.

“If
the profitability reported in beta tests is able to be repeated on a large
scale, it will overshadow the revenues coming from Bitcoin mining at the
moment,” the report added.

Miners are
increasingly switching from Bitcoin to HPC and changing locations for service
provision. Russia is becoming increasingly popular, having significant energy
surpluses since its aggression towards Ukraine began. Currently, the Russian
Federation offers some of the cheapest energy for companies in the digital
asset mining sector.

For
publicly listed mining companies, it could be a chance to improve results,
which have not been positive recently. Riot Platforms Inc. and Galaxy Digital
Holdings Ltd. reported negative financial results in the last quarter. Moreover,
the mining companies’ stocks have lost heavily from their 2021 peaks through low
Bitcoin prices and a growing number of hacks.



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