Crypto Miners Find a New Era
A perfect match
a single data center could require up to hundreds of millions of dollars to support AI workloads, which require GPUs and AI accelerators, which are much more expensive than ASICs used for bitcoin mining. But miners already have the land, permits and grid connections, so the conversions to support AI can happen faster than building from scratch, giving them a structural advantage.
Crypto miners transformed into data centers
A slew of bitcoin (BTC-USD) miners now use their existing, power-ready infrastructure to host AI and HPC workloads, often replacing or supplementing mining rigs with graphics processing units (“GPUs”) clusters from the likes of Nvidia (NVDA).
AI margin is higher
Miners have been exploring ways to diversify their businesses since the April 2024 halving event cut block rewards to 3.125 BTC and consequently made it harder to maintain profitability. A rising network difficulty also weighed on margins across the industry.
The profit margins in AI are higher than mining, causing many miners to pivot since they have captured cheap, long-term energy contracts. It makes sense to monetize that beyond Bitcoin mining now that it is significantly less profitable.
Investor Support
Investors currently evaluate the value of Bitcoin miners almost entirely based on the HPC/AI business opportunities, as HPC/AI revenue and profits far exceed those of mining. Consequently, discussions about Bitcoin and mining currently account for less than 10% of discussions about miners.
Market
Numbers speak
A 2024 report from the Bitcoin Policy Institute said that on a per kilowatt-hour (kWh) basis, AI compute could earn 25 times as much as bitcoin mining.
Market demand
Due to the sheer volume of capital investment, insufficient resources, and demand far outstripping supply, the four major cloud providers (Microsoft, Amazon, Alphabet, and Oracle), as well as large AI companies such as Meta and OpenAI, have all resorted to relying heavily on outsourcing vendors.
Many have close ties with tech giants
What Outsourcing Vendors Have in Common
Note that these outsourcing vendors almost all share the following two characteristics:
- Nscale, Applied Digital, CoreWeave, and Nebius are all invested in and backed by Nvidia.
- They were all previously cryptocurrency miners.
Tech Giants Are Leasing Instead of DIY
Even tech giants with deep pockets are finding that the massive capital expenditures, logistics, and related resource investments are exceeding their capabilities and capacity. However, no one can afford to fall behind other tech giants due to insufficient computing capacity. The unanimous response from tech giants is to shift operations from building their own AI data centers to leasing from specialized data center vendors.
OpenAI, Meta, Alphabet, X.ai, Microsoft, and Oracle have all been actively moving in this direction this year. Microsoft has been the most aggressive, having committed over $33 billion to providers including Nebius, CoreWeave, Nscale, and Lambda.
Famous Crypto miners transformed into data centers
Nscale
The company emerged as a spinoff from crypto mining company Arkon Energy in May 2024. Nvidia will invest £500 million (US$683 million) in Nscale. Nscale has quickly become a crucial component of the UK’s global AI efforts.
Nebius
For more information about Nebius (ticker: NBIS), see my post of “Nebius is the largest European AI data center“
Microsoft announced on September 9th that it had signed a multi-year contract with Nebius, running until 2031 and valued at $1.94 billion.
Microsoft announced on October 14th that it had reached a new agreement to lease cloud computing capacity from Nscale. This capacity will be located in Nscale’s data center facility in Portugal, which is expected to be operational early next year. Microsoft previously signed a $6.2 billion agreement with Nscale to secure access to its high-performance artificial intelligence infrastructure in Narvik, Norway. The US tech giant also recently partnered with the British company to build the UK’s largest supercomputer as part of its $30 billion investment in the country.
On November 11th 2025, Nebius disclosed company inks $3B AI infrastructure deal with Meta.
Applied Digital
For more information about Applied Digital (ticker: APLD), see my post of “How does Applied Digital make money?“
CoreWeave
For more information about CoreWeave (US ticker: CRWV), see my post “How GPU farms CoreWeave make money?“
Microsoft is CoreWeave’s largest customer, accounting for 62% of its revenue in 2024. Meta Platforms and IBM are also clients. CoreWeave also brought on OpenAI this year. Nvidia currently owns a 7% stake in the cloud computing company CoreWeave, which leases significant data center capacity to OpenAI, Microsoft, and other AI companies.
Earlier in September, Nvidia signed a $6.3 billion contract with CoreWeave, under which Nvidia will buy back any idle cloud capacity from CoreWeave until April 2032.
On September 25, CoreWeave announced a new $6.5 billion investment agreement with OpenAI, bringing the total value of the contract between the two parties to $22.4 billion.
On September 30, CoreWeave announced a new $14 billion AI cloud center agreement with Meta, and its stock price rose 16% as soon as it opened that day.
On November 6, artificial intelligence startup Vast Data announced that it had signed a $1.17 billion commercial agreement with cloud service provider CoreWeave.
Cipher Mining
According to a Bloomberg report on September 25th, cryptocurrency mining company Cipher Mining (ticker: CIFR) signed a $3 billion, 10-year colocation deal with AI computing startup Fluidstack. The deal involves a 5.4% equity warrant in exchange for a $1.4 billion lease obligation. Google has committed to purchasing $1.4 billion of AI computing services from Fluidstack and has the right to acquire a 5.4% stake in Cipher.
On November 3 2025, Cipher Mining entered a $5.5 billion, 15-year lease agreement with Amazon Web Services (AMZN) to provide turnkey space and power for AI workloads.
On November 20, 2025, Cipher Mining signed a 10-year high-performance computing (HPC) hosting agreement with Fluidstack. Fluidstack’s main business is building HPC clusters for large companies.
As of October 18th, Cipher’s stock price has soared approximately 300% since 2025.
TeraWulf
Google has announced an additional $1.4 billion investment in TeraWulf, nearly doubling its stake to 14%. Google has pledged $1.4 billion in financing, highlighting its strategic interest in the growing cryptocurrency mining sector. This expansion is expected to significantly strengthen TeraWulf’s market position.
On October 28, TeraWulf and Fluidstack entered into a $9.5 billion, 25-year joint venture agreement for artificial intelligence computing to build 168 megawatts of high-performance computing (HPC) capacity at their Texas campus. This caused TeraWulf’s stock price to surge 20% upon opening that day.
Crusoe
Crusoe shares a striking resemblance to CoreWeave, the successful IPO of AI cloud service provider CoreWeave. Both companies, with cryptocurrency backgrounds, have successfully transitioned to cloud service providers leveraging their GPU resources, representing classic examples of the AI computing gold rush.
Stargate’s first data center in Abilene, Texas, was officially unveiled, with Crusoe, the founder of US-based AI infrastructure, selected as the sole developer and operator. Wall Street also widely believes Crusoe is poised to become the second US AI infrastructure startup to successfully go public, following CoreWeave.
IREN Ltd.
IREN Ltd. (ticker: IREN), formerly Iris Energy Limited, is an Australia-based Bitcoin mining and data center company with operations in the United States and Canada. Founded in 2018, IREN builds, owns, and operates data centers and power infrastructure for Bitcoin mining using low-cost renewable energy. The company is also expanding into high-performance computing and artificial intelligence cloud services.
Announced on October 7, 2025: It has signed additional multi-year cloud service contracts with major AI companies for the deployment of Nvidia Blackwell GPUs. On November 3, 2025, IREN signed a major AI cloud services contract with Microsoft worth approximately $9.7 billion, with a five-year term. The contract provides Microsoft with the right to use NVIDIA GB300 GPUs, and the total contract value is approximately $9.7 billion, including a 20% upfront payment.
As of October 18, IREN’s stock price has soared 500% since 2025.
HIVE Digital
HIVE Digital (ticker：HIVE) recently bought a 7.2 megawatt data center in Toronto, Canada, through its BUZZ High Performance Computing business for an aggregate purchase price of CAD$17.3M (US$12.4M). Under the terms, it paid to the vendor CAD$12M and issued 1M common shares at CAD$5.25 per HIVE share.
Other Vendors
Companies like Core Scientific (ticker: CORZ), HIVE Digital, Bitfarms (ticker: BITF), and Riot Platforms (ticker: RIOT), whose main business was previously cryptocurrency mining, have also transformed into the field of AI data centers.
Capital Market Performance
Stock Price Performance
The following table compares the stock price performance of the companies discussed in this article.
Investment Risks
The companies discussed in this article share the following common investment risks:
- Overly concentrated customer base.
- Currently operating at a high rate.
- Highly dependent on continuous financing.
- The company’s development is narrow, relying solely on the dividends of rapid development of artificial intelligence.
These risks are all significant, so investors should exercise caution before stepping in.
I am the author of the original text, the essence of this story was originally featured on Money Magazine, Issue of December 2025
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