philip lelyveld The world of entertainment technology

America’s Biggest Bitcoin Miners Are Pivoting to AI

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The change reflects rabid demand among AI companies for data centers equipped to handle the energy-intensive workloads required to train their models. Ironically, as the AI arms race intensifies, large-scale bitcoin mining firms—which contributed to the AI boom by pouring billions of dollars into data center infrastructure—are being forced to reinvent themselves. ...

In the last few years, with advances in hardware, the amount of competition on the bitcoin network has increased at an exponential rate, meaning that winning a bitcoin reward has required ever more compute. In 2024, meanwhile, the size of that reward fell by half—as happens roughly every four years—to 3.125 bitcoin. Against that backdrop, the recent decline in the price of bitcoin to around $85,000—a 30 percent drop from its 2025 peak—has created a perfect storm that threatens the profitability of all but the most cost-efficient mines. ...

Still, there remain holdouts in so-called pure-play mining, including American Bitcoin, a company launched by Eric Trump. When it debuted in March, American Bitcoin was effectively spun out of Hut 8, a former bitcoin mining company now operating in the AI and HPC space, which remains a majority shareholder. Unlike other mining companies, American Bitcoin does not own any facilities, only the specialized mining hardware.

American Bitcoin is currently able to mine a single unit of bitcoin at an average all-in cost of roughly $50,000, thanks to favorable power rates and comparatively low overheads, according to president Matt Prusak. ...

Others are betting that bitcoin mining will become the sole preserve of sovereign states—like Bhutan, El Salvador, and the US—that cannot abide any threat to the value of the national bitcoin stockpiles they have accumulated. “Maybe people will mine at a loss,” says Demirors, “because it’s a matter of national security.”

See the full story here; https://www.wired.com/story/bitcoin-miners-pivot-ai-data-centers/?utm_source=substack&utm_medium=email