AI and Bitcoin Mining Compete for US Energy Resources

AI's race for US energy butts up against bitcoin mining

US technology companies are pursuing energy assets held by bitcoin miners as they race to secure a shrinking supply of electricity for their rapidly expanding artificial intelligence and cloud computing data centers. Those data centers are driving the fastest U.S. power demand growth since the start of the millennium, outpacing grid expansions and leaving giant technology companies, like Amazon and Microsoft, to scavenge for vast amounts of electricity. The electricity scramble is jolting the energy-intensive cryptocurrency mining industry. Some miners are making huge profits leasing or selling their power-connected infrastructure and sites to tech, while others are losing access to the electricity needed to stay in business. "The AI battle for dominance is a battle being had by the biggest and best capitalised companies in the world and they care like their lives depend on it that they win," said Greg Beard, CEO of Stronghold Digital Mining, a publicly-traded bitcoin mining company. "Do they care about what they pay for power? Probably not." Data centers could use up to 9% of total electricity generated in the US by the end of the decade, more than doubling their current consumption, as technology companies pour funds into expanding their computing hubs, the Electric Power Research Institute said in May. Currently, data centers account for about 1%-1.3% of global electricity consumption, versus crypto mining's roughly 0.4%, according to the International Energy Agency. That disparity is expected to grow. Analysts expect 20% of bitcoin miner power capacity to pivot to AI by the end of 2027. Over the past year, bitcoin miners and AI data center owners have increasingly vied for the same power assets and contracts, executives from over half-dozen publicly traded U.S. crypto mining companies told Reuters. Marathon Digital Holdings, the world's biggest publicly traded bitcoin miner, was among those eyeing a nuclear-powered data center owned by Talen Energy in Pennsylvania, two sources familiar with the situation said. "We are always willing to talk with anyone who is looking to sell a data center," Marathon said, without confirming specific interest in the site. Amazon, with a market capitalization of more than 350 times the size of Marathon, bought the center in a deal announced in March and secured enough electricity to power nearly all the homes in New Mexico. Growing interest Many large miners that own land and power hookups are shifting strategies from exclusively crypto mining to marketing their property and energy services to AI and cloud computing businesses. "We've gotten a lot of interest from everyone from an Amazon or Google," said Kerri Langlais, chief strategy officer of bitcoin miner TeraWulf, which has a site in upstate New York that is capable of up to 770 megawatts (MW). The frenzy of tech prospects for miners kicked off in June, when crypto miner Core Scientific - fresh out of bankruptcy - became the first to announce a major agreement to lease its power-connected facilities to Nvidia-backed CoreWeave in deals estimated at over $6.7 billion over 12 years. Several miners have since said they would lease, or act as subcontractors to develop AI data centers. New data centers, which have typically been around 20 MW, are being built up to 1,000 MW today. But wait times to connect new power supplies in the United States can take several years. For crypto miners with large energy assets, repurposing their operations for AI and cloud computing could make their facilities as much as five times more valuable, Morgan Stanley research showed. Buying or leasing space at a miner with at least 100 MW of capacity can cut the wait times for a data center to launch by about 3.5 years, saving technology companies billions, Morgan Stanley said. Tough transition Still, the handoff of electricity supplies and infrastructure to tech companies from crypto miners will not be seamless for most, if at all possible, several miners said. "Most bitcoin miners that are out there saying they are going to do AI don't really know what they're getting into," said CleanSpark CEO Zach Bradford, adding his company will stick with crypto mining as its core business. About 90% of the country's bitcoin mines can be constructed in six to 12 months, versus three years for a more sophisticated data center, Bradford said. Those mines, he added, would have to be rebuilt to incorporate specialized cooling structures and other infrastructure to be used for AI or cloud computing. The high costs of building AI data centers would be a barrier to many crypto miners, who were largely barred from accessing capital after a 2022 bitcoin price crash, said Sergii Gerasymovych, CEO of EZ Blockchain, which supplies equipment and services for crypto mining. This year, EZ Blockchain had a 10-MW project in the works with a South Carolina utility until the utility contracted for 100 MW with a hyperscaling AI company. Hyperscalers include the world's biggest technology companies that operate massive global networks of data centers and cloud infrastructure. While the financial details of the AI data center deal were unclear, Gerasymovych said the company he was up against had billions of dollars of capital to play with. "For them, it's about speed to market and they're just throwing money around," he said. "What is there to compete with?"

AI's race for US energy butts up against bitcoin mining

US technology companies are pursuing energy assets held by bitcoin miners as they race to secure a shrinking supply of electricity for their rapidly expanding artificial intelligence and cloud computing data centers. Those data centers are driving the fastest U.S. power demand growth since the start of the millennium, outpacing grid expansions and leaving giant technology companies, like Amazon and Microsoft, to scavenge for vast amounts of electricity. The electricity scramble is jolting the energy-intensive cryptocurrency mining industry. Some miners are making huge profits leasing or selling their power-connected infrastructure and sites to tech, while others are losing access to the electricity needed to stay in business. "The AI battle for dominance is a battle being had by the biggest and best capitalised companies in the world and they care like their lives depend on it that they win," said Greg Beard, CEO of Stronghold Digital Mining, a publicly-traded bitcoin mining company. "Do they care about what they pay for power? Probably not." Data centers could use up to 9% of total electricity generated in the US by the end of the decade, more than doubling their current consumption, as technology companies pour funds into expanding their computing hubs, the Electric Power Research Institute said in May. Currently, data centers account for about 1%-1.3% of global electricity consumption, versus crypto mining's roughly 0.4%, according to the International Energy Agency. That disparity is expected to grow. Analysts expect 20% of bitcoin miner power capacity to pivot to AI by the end of 2027. Over the past year, bitcoin miners and AI data center owners have increasingly vied for the same power assets and contracts, executives from over half-dozen publicly traded U.S. crypto mining companies told Reuters. Marathon Digital Holdings, the world's biggest publicly traded bitcoin miner, was among those eyeing a nuclear-powered data center owned by Talen Energy in Pennsylvania, two sources familiar with the situation said. "We are always willing to talk with anyone who is looking to sell a data center," Marathon said, without confirming specific interest in the site. Amazon, with a market capitalization of more than 350 times the size of Marathon, bought the center in a deal announced in March and secured enough electricity to power nearly all the homes in New Mexico. Growing interest Many large miners that own land and power hookups are shifting strategies from exclusively crypto mining to marketing their property and energy services to AI and cloud computing businesses. "We've gotten a lot of interest from everyone from an Amazon or Google," said Kerri Langlais, chief strategy officer of bitcoin miner TeraWulf, which has a site in upstate New York that is capable of up to 770 megawatts (MW). The frenzy of tech prospects for miners kicked off in June, when crypto miner Core Scientific - fresh out of bankruptcy - became the first to announce a major agreement to lease its power-connected facilities to Nvidia-backed CoreWeave in deals estimated at over $6.7 billion over 12 years. Several miners have since said they would lease, or act as subcontractors to develop AI data centers. New data centers, which have typically been around 20 MW, are being built up to 1,000 MW today. But wait times to connect new power supplies in the United States can take several years. For crypto miners with large energy assets, repurposing their operations for AI and cloud computing could make their facilities as much as five times more valuable, Morgan Stanley research showed. Buying or leasing space at a miner with at least 100 MW of capacity can cut the wait times for a data center to launch by about 3.5 years, saving technology companies billions, Morgan Stanley said. Tough transition Still, the handoff of electricity supplies and infrastructure to tech companies from crypto miners will not be seamless for most, if at all possible, several miners said. "Most bitcoin miners that are out there saying they are going to do AI don't really know what they're getting into," said CleanSpark CEO Zach Bradford, adding his company will stick with crypto mining as its core business. About 90% of the country's bitcoin mines can be constructed in six to 12 months, versus three years for a more sophisticated data center, Bradford said. Those mines, he added, would have to be rebuilt to incorporate specialized cooling structures and other infrastructure to be used for AI or cloud computing. The high costs of building AI data centers would be a barrier to many crypto miners, who were largely barred from accessing capital after a 2022 bitcoin price crash, said Sergii Gerasymovych, CEO of EZ Blockchain, which supplies equipment and services for crypto mining. This year, EZ Blockchain had a 10-MW project in the works with a South Carolina utility until the utility contracted for 100 MW with a hyperscaling AI company. Hyperscalers include the world's biggest technology companies that operate massive global networks of data centers and cloud infrastructure. While the financial details of the AI data center deal were unclear, Gerasymovych said the company he was up against had billions of dollars of capital to play with. "For them, it's about speed to market and they're just throwing money around," he said. "What is there to compete with?"

AI's race for US energy butts up against bitcoin mining

Data centers could use up to 9% of total electricity generated in the U.S. by the end of the decade, more than doubling their current consumption, as technology companies pour funds into expanding their computing hubs, the Electric Power Research Institute said in May. Currently, data centers account for about 1%-1.3% of global electricity consumption, versus crypto mining's roughly 0.4%, according to the International Energy Agency. That disparity is expected to grow. Analysts expect 20% of bitcoin miner power capacity to pivot to AI by the end of 2027. Over the past year, bitcoin miners and AI data center owners have increasingly vied for the same power assets and contracts, executives from over half-dozen publicly traded U.S. crypto mining companies told Reuters. Marathon Digital Holdings, the world's biggest publicly traded bitcoin miner, was among those eyeing a nuclear-powered data center owned by Talen Energy in Pennsylvania, two sources familiar with the situation said. "We are always willing to talk with anyone who is looking to sell a data center," Marathon said, without confirming specific interest in the site. Amazon, with a market capitalization of more than 350 times the size of Marathon, bought the center in a deal announced in March and secured enough electricity to power nearly all the homes in New Mexico. GROWING INTEREST Many large miners that own land and power hookups are shifting strategies from exclusively crypto mining to marketing their property and energy services to AI and cloud computing businesses. "We've gotten a lot of interest from everyone from an Amazon or Google," said Kerri Langlais, chief strategy officer of bitcoin miner TeraWulf, which has a site in upstate New York that is capable of up to 770 megawatts (MW). The frenzy of tech prospects for miners kicked off in June, when crypto miner Core Scientific - fresh out of bankruptcy - became the first to announce a major agreement to lease its power-connected facilities to Nvidia-backed CoreWeave in deals estimated at over $6.7 billion over 12 years. Several miners have since said they would lease, or act as subcontractors to develop AI data centers. New data centers, which have typically been around 20 MW, are being built up to 1,000 MW today. But wait times to connect new power supplies in the United States can take several years. For crypto miners with large energy assets, repurposing their operations for AI and cloud computing could make their facilities as much as five times more valuable, Morgan Stanley research showed. Buying or leasing space at a miner with at least 100 MW of capacity can cut the wait times for a data center to launch by about 3.5 years, saving technology companies billions, Morgan Stanley said. Still, the handoff of electricity supplies and infrastructure to tech companies from crypto miners will not be seamless for most, if at all possible, several miners said. "Most bitcoin miners that are out there saying they are going to do AI don't really know what they're getting into," said CleanSpark CEO Zach Bradford, adding his company will stick with crypto mining as its core business. About 90% of the country's bitcoin mines can be constructed in six to 12 months, versus three years for a more sophisticated data center, Bradford said. Those mines, he added, would have to be rebuilt to incorporate specialized cooling structures and other infrastructure to be used for AI or cloud computing. The high costs of building AI data centers would be a barrier to many crypto miners, who were largely barred from accessing capital after a 2022 bitcoin price crash, said Sergii Gerasymovych, CEO of EZ Blockchain, which supplies equipment and services for crypto mining. This year, EZ Blockchain had a 10-MW project in the works with a South Carolina utility until the utility contracted for 100 MW with a hyperscaling AI company. Hyperscalers include the world's biggest technology companies that operate massive global networks of data centers and cloud infrastructure. While the financial details of the AI data center deal were unclear, Gerasymovych said the company he was up against had billions of dollars of capital to play with. "For them, it's about speed to market and they're just throwing money around," he said. "What is there to compete with?" (Reporting by Laila Kearney and Mrinalika Roy; Editing by Marguerita Choy)

The AI and bitcoin mining clash for U.S. power has begun

A major energy struggle is unfolding in the United States, as big tech companies and cryptocurrency miners clash over power supplies. As artificial intelligence (AI) and cloud computing data centers grow rapidly, they are competing fiercely with bitcoin mining for electricity. This competition is changing the way energy is used and who gets access to it. According to Reuters, U.S. tech giants are snapping up energy resources from bitcoin miners to fuel their expanding AI and cloud computing centers. These data centers are experiencing a huge rise in electricity demand, which is expected to reach up to 9% of all U.S. electricity by the end of the decade. This is more than double their current usage and is outpacing the growth of power grids. As a result, tech companies like Amazon and Microsoft are scrambling for electricity wherever they can find it. Just recently, Donald Trump pointed out this issue in an interview, too. This scramble for power is impacting the bitcoin mining industry. Some miners are making significant profits by leasing or selling their energy infrastructure to tech firms, while others are struggling to maintain their operations due to reduced access to electricity. Is AI green, how sustainable is it? Bitcoin miners are facing a tough situation. Some are able to make good deals by renting out or selling their power resources, but many are losing access to the energy they need. Greg Beard, CEO of Stronghold Digital Mining, emphasizes the intensity of this competition: "The AI battle for dominance is a battle being had by the biggest and best capitalized companies in the world, and they care like their lives depend on it that they win." This fierce competition is reshaping the energy market. Bitcoin miners are starting to pivot towards AI and cloud computing, but this transition comes with significant challenges. Analysts predict that by 2027, up to 20% of bitcoin miners' power capacity might shift to AI. However, turning a bitcoin mining facility into an AI data center is not straightforward. It requires expensive upgrades, such as advanced cooling systems and new infrastructure. The timeline for setting up new AI data centers is also much longer compared to bitcoin mines. While bitcoin mines can be set up in six to twelve months, a high-tech data center may take up to three years. This difference in setup time is crucial for tech companies that need to move quickly. The financial resources of tech giants make a big difference in this energy competition. Companies like Amazon have large capital reserves and can afford to invest heavily in acquiring and developing energy resources. In contrast, many bitcoin miners are struggling financially and cannot compete with the financial power of tech giants. For example, Marathon Digital Holdings, the largest publicly traded bitcoin miner, was interested in a nuclear-powered data center but lost out to Amazon in the deal. The battle between AI-driven tech companies and bitcoin miners over energy resources is transforming the U.S. energy landscape. As data centers and cryptocurrency mining vie for power, the energy market is evolving rapidly. Technology companies are investing heavily in securing energy assets, while bitcoin miners face the challenge of adapting to this new competitive environment. As this energy race continues, the way these two sectors interact will shape the future of energy use and availability. The outcome of this competition will have lasting effects on both industries and the overall energy market.