Bitcoin Miners Abandon Ship for AI Computing Power
The Bitcoin mining industry is undergoing a significant transformation as major miners shift their focus towards AI computing power. Over the past year, every publicly traded Bitcoin miner has faced financial struggles, leading them to rebrand and reposition themselves as 'energy infrastructure platforms,' 'vertically integrated AI cloud service providers,' or 'digital infrastructure companies built on power, land, and computing power.' This change in revenue structure has led to their market capitalization exceeding its valuation during its time as a pure Bitcoin mining company.
In April 2024, the Bitcoin block reward halved, forcing miners to choose between holding onto mined Bitcoin or upgrading their hardware to shift towards high-performance computing (HPC) and diversify their business. With Bitcoin's surge in price from under $70,000 in October 2024 to $124,000 by October 2025, some miners continued mining and held onto their Bitcoin output. However, the market liquidation event on October 10 caused a downturn that has yet to fully recover.
With the current price of Bitcoin at nearly half its peak from October last year, selling Bitcoin after mining yields almost no profit. The combined mining cost rose from around $40,000 in February 2024 to a range of $90,000 to $110,000 between October 2025 and July 2026, and by August this year, the combined Bitcoin mining cost hit a new high, surging to $140,000.
Many miners are now shifting their focus towards AI computing power, which shares similar underlying requirements with ASIC chips used in Bitcoin mining. This allows them to transition into AI inference without starting from scratch, significantly lowering the barrier to entry. Core Scientific's revenue from data center hosting services for AI and HPC increased from $10.6 million in Q2 2025 to $136.7 million in Q2 2026, while their mining income declined by 65%.
The shift towards AI computing power has led to a collective rush among miners, with many signing massive demand contracts for electricity and land. Core Scientific has committed up to 2.5 GW of available computing capacity to AMD and CoreWeave, with a total potential revenue exceeding $24 billion over the contract period. However, market commentators have warned that this shift may backfire on them due to the lack of an automatic adjustment mechanism in AI computing power prices.
Once new supply fills the demand gap, computing power prices will drop rapidly, making the 15- to 20-year long-term leases signed by miners at today's high prices appear excessively costly. Moreover, converting a mining facility into an AI computing park is straightforward, but once you replace ASIC miners with H100 GPUs and sign a long-term lease, it becomes nearly impossible to revert to mining.
As the next market cycle reverses and Bitcoin prices rise above the $60,000 low, combined with a decline in overall network difficulty, mining will once again become profitable. By then, former miners who have fully transitioned away from mining will be bound by long-term lease contracts and forced to watch opportunities slip away.