Bitcoin Miners Abandon Ship as AI Data Centers Lure Higher Profits

A recent report from digital asset manager CoinShares reveals that several major crypto mining firms are shifting their focus away from Bitcoin mining and towards artificial intelligence data centers.

The companies, including Core Scientific, Keel Infrastructure, IREN, and Cipher Digital, have begun to scale back or wind down their operations in favor of AI data centers, which offer significantly higher profits. According to the report, these firms are leaving behind roughly 35 exahashes per second, reducing the global Bitcoin network's computing power by around 4%.

Economics are driving this pivot, as AI data centers yield approximately $1.5 million in annual profit per megawatt compared to about $0.5 million for Bitcoin mining. Core Scientific paid a hefty price of $41.9 million in the second quarter to cancel a chip order with Block's Proto division, abandoning 15 EH/s of 3nm hardware.

Keel Infrastructure has taken this shift further by ceasing all mining activities in June, marking the first listed mining firm to report zero mining revenue. The company suffered a staggering gross margin loss of -285% due to accelerated depreciation on retired equipment. Keel plans to liquidate its remaining 1,861 BTC by year's end.