Foundries Squeezed: AI Outbids Miners for Chip Allocation

Bitcoin miners are facing a daunting reality as they struggle to secure chip allocation from foundries. Despite China controlling 99% of Bitcoin mining hardware, the real threat lies not in Chinese dominance but rather in the growing demand for AI and HPC (High-Performance Computing) clients.

The current situation has left some in the industry wondering if AI is the biggest existential threat to Bitcoin's competitiveness. Foundries are being squeezed by deep-pocketed clients bidding up chip prices, leaving miners with limited access to necessary hardware.

While a total supply shock from China would likely be absorbed by the network, losing the foundry war to AI could have devastating consequences for mining. The industry is caught in a precarious balancing act as it tries to navigate this new landscape.