Bitcoin Miners See Promising Shift in Pivoting Towards AI and High-Performance Computing (HPC) Data Center Deals

Investing.com -- Piper Sandler analysts highlighted a promising shift for Bitcoin miners in a note Wednesday, emphasizing the substantial earnings potential

Bitcoin miners are pivoting towards artificial intelligence (AI) and High-Performance Computing (HPC) data center deals in a bid to shore up their earnings potential, Piper Sandler said in a note to clients on Wednesday.

The analysts noted that while Bitcoin miners are still in the "early innings" of this transition, the economics are too compelling to ignore, putting pressure on miners to diversify their operations.

"We believe the economics are significantly more attractive versus the core mining business," the firm said, adding that it expects to see more announcements in 2025.

The note highlighted some deals that were announced last year, such as Core Scientific/CoreWeave and TeraWulf/Core42, as early indicators of this trend.

"We expect more announcements in 2025 with the larger miners (GLXY, RIOT, HUT). One key advantage for Bitcoin miners is their approved access to power, which is highly attractive to the AI companies," Piper said.

Bitcoin mining and training AI models are both power-intensive processes. According to Piper, the existing infrastructure of Bitcoin miners offers a faster and more efficient solution for AI companies.

"This allows AI companies to quickly scale their operations without having to go through the lengthy process of building and gaining approval for new sites," the analysts explained.

Piper estimates that AI/HPC data center contracts could triple miner EBITDA at certain sites.

The note also provides an overview of potential sites for companies like RIOT, HUT, GLXY, and MARA, detailing power authorizations and possible economic outcomes of AI/HPC deals.

"While not all Bitcoin miners are currently pursuing these opportunities, we believe that those who do will see a material boost in their financial performance," the analysts concluded.