Bitcoin Miners Shift Focus to AI Data Centers

Key Takeaways:

Bitcoin miners are pursuing over $70 billion in AI data center contracts to diversify revenue streams.
Mining companies could generate 70% of revenue from AI by year-end, up from 30% currently.
WGMI’s top holdings are converting power infrastructure to support artificial intelligence workloads.

Bitcoin miners are racing to transform themselves into artificial intelligence infrastructure providers as the sector pursues more than $70 billion in data center contracts that could reshape their business models within a year.

Listed bitcoin mining companies could derive as much as 70% of their revenues from AI and high-performance computing by the end of 2026, up from roughly 30% at the start of the year, according to a recent CoinShares Bitcoin Mining report. The shift reflects miners capitalizing on existing power infrastructure that AI companies need but traditional data centers take years to develop.

The CoinShares Bitcoin Mining ETF (WGMI) holds companies leading this transition, with several top holdings announcing multi-billion-dollar AI contracts in recent months. The fund’s largest position, Cipher Digital Inc. (CIFR) at 17.5%, renamed itself in February to signal its evolution from a pure mining operation into a diversified digital infrastructure company, according to the report.

Cipher Digital is developing a 300-megawatt site at Barber Lake with backing from Fortress Credit Advisors and secured a multi-billion-dollar agreement with Fluidstack, which counts Google as an investor, though revenue from those contracts had not yet started as of the fourth quarter, the report said.

Revenue Mix Shifts Toward AI

The pivot stems from economics that favor AI over bitcoin mining at current market conditions. Hash prices, which measure mining revenue per unit of computing power, remain near cyclical lows while AI infrastructure offers higher and more stable returns, the report said.

TeraWulf Inc. (WULF), the fund’s third-largest holding at 10.8%, reported $12.8 billion in total contracted high-performance computing revenue, according to the report. The company generated 27% of its fourth quarter revenue from AI work, up from essentially zero a year earlier.

The fund’s second-largest holding has scaled even further into AI infrastructure. IREN Limited (IREN) reached $17.3 million in AI cloud services revenue during the fourth quarter while scaling to more than 10,900 Nvidia GPUs, the report said. The company, representing nearly 15% of the fund, is expanding AI capacity at its Childress, Texas facility with plans for up to 200 megawatts of liquid-cooled GPU infrastructure.

Among WGMI’s holdings, Core Scientific Inc. (CORZ) generated the highest percentage of revenue from the new business line at 39% of fourth quarter sales from AI and high-performance computing colocation, according to the report. The company, which represents 7.7% of the portfolio, expanded its CoreWeave contract to $10.2 billion over 12 years and has energized roughly 350 megawatts for AI work.

For more news, information, and strategy, visit the CoinShares Crypto ETF Hub.

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