Bitcoin BTC/USD miners are investing millions into artificial intelligence (AI) businesses, expecting billions in return as they diversify their operations.
What Happened: According to a CNBC report on Monday, Core Scientific Inc. CORZ, a Bitcoin mining company, announced a 12-year deal with cloud provider CoreWeave to provide infrastructure for AI use cases. This agreement is expected to generate more than $3.5 billion in revenue over the contract period.
CoreWeave, backed by AI chip giant Nvidia Corp. NVDA, rents out graphics processing units (GPUs), essential for training and running AI models. Core Scientific will provide about 200 megawatts of infrastructure to support CoreWeave’s operations.
Core Scientific, which emerged from bankruptcy in January, has been mining a mix of digital assets since 2017. The company began diversifying into other services in 2019.
Why It Matters: Core Scientific’s AI push follows similar move by another well-known Bitcoin mining firm, Bitdeer Technologies Group BTDR, which partnered with Nvidia to offer AI cloud computing services
The pivot towards AI by Bitcoin miners was triggered by the halving event in April, which halved the new issuance of Bitcoin. This event, designed to counter inflation, has historically preceded a significant surge in Bitcoin's price. Miners began turning to AI to mitigate the impact of the halving event.
Other miners like Bit Digital, Hive, Hut 8, and TeraWulf are also looking to bolster their revenue streams after the Bitcoin halving in April cut rewards paid out to miners by 50%. Many are retrofitting their facilities to meet the needs of the AI market.
According to CoinShares, Bit Digital derives 27% of its revenue from AI. Hut 8 generates 6% of sales from AI, and Hive, which has data centers in Canada and Sweden, gets 4% of its revenue from these services.
Price Action: The shares of Core Scientific closed 2.53% higher at $4.87 during Monday’s regular trading session, according to data from Benzinga Pro. Bitcoin was exchanging hands at $69,192.81, up 1.32% in the last 24 hours.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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