AI Trade Reversal Hits Miners as Bitcoin Gains Strength
The AI trade that transformed bitcoin miners into AI-infrastructure companies is facing its sharpest reversal yet.
The AI Infrastructure Growth Index, tracked by TheEnergyMag, fell 11.13% on Wednesday alone, extending its one-month decline to 34%. This represents a retreat of about 42% from its record high in June.
The immediate catalyst for the selloff was a renewed debate over how the AI boom is being financed. Nvidia is reportedly considering a guarantee of up to $250 billion to help OpenAI lease a planned 10-gigawatt data-center campus in Ohio, along with separate financing of up to $350 billion for Nvidia chips used at the site.
This has revived concerns about 'circular financing', where chipmakers and hyperscalers invest in AI laboratories or cloud providers, which then spend some of that capital on equipment or computing capacity supplied by their investors.
The pressures intensified by reports of progress in China's domestic chipmaking industry and the blockbuster debut of memory producer CXMT raised fears of greater competition. Oil prices and Treasury yields also jumped Wednesday, increasing financing costs for a sector whose projected revenue often sits years in the future.