The total search for electricity to fuel the insatiable appetite for artificial intelligence is giving a boost to another energy-intensive industry: cryptocurrency mining.
Seven months after a bitcoin (BTC-USD) event halved the rewards miners receive for verifying Bitcoin transactions, crypto mining companies have found revenue by converting their existing energy to power a different type of data center equipped to run applications d ‘AI.
Earlier this month, Galaxy Digital (GLXY.TO) has become the latest miner to sign a deal with a US-based hyperscaler. Galaxy has committed all 800 megawatts of its mining capacity to host high-performance computers.
“That makes it a better investment than bitcoin, certainly over a three, four, five year horizon,” Mike Novogratz, CEO and founder of Galaxy Digital, told Yahoo Finance (video above). much more profitable.
This new revenue stream is a welcome sign two years after a crypto winter nearly wiped out major miners.
While the price of Bitcoin has more than quadrupled from 2022 lows to record highs, most recently boosted by Donald Trump’s victoryminers say retrofitting existing data centers to host graphics processing units provides more long-term stability.
Learn more: Bitcoin breaks new record: is now the right time to invest?
Jason Les, CEO of Riot Platforms, which has mining facilities in Texas and Kentucky, said his company has received many inquiries from “blue chip” AI companies looking to secure large-scale power capacity. In most cases, technology companies have offered to cover the investment costs of upgrading existing facilities.
“This is a consistent and reliable cash flow,” Les said, adding: “One that is not subject to the volatility of Bitcoin like the rest of our business.” Les stressed that he had held discussions with “very credible counterparties”.
“If you work with a well-capitalized partner, you have confidence that they will honor these agreements for a very long period of time,” he said.
In many ways, the amount of energy capacity needed to power AI and cryptocurrency mining lends both sectors to partnerships. Data center energy demand is expected to roughly double by the end of the decade, with AI being the main driver. Bitcoin mining, meanwhile, accounts for nearly 1% of global energy demand, according to the International Energy Agency.
As hyperscalers seek access to all energy sources, including nuclearminers offer the fastest way to deploy electrical capacity, without building a power plant or data center from scratch.
