Bitcoin Miners Control 27 GW Power Capacity, Emerge as Key Players in AI Infrastructure Race

Bitcoin Miners Emerge as Unlikely Power Brokers in AI Infrastructure Race, Says Bernstein - Decrypt

Individual miners are locking in major partnerships, often involving equity commitments that align both sides on scaling up capacity. As Google and Blackstone move to establish a new AI cloud venture, an unexpected group of players stands to benefit: Bitcoin miners. The Wall Street Journal reported late Monday that Google and Blackstone are planning to create a joint AI cloud company that would deploy Google's custom chip technology, with Blackstone committing $5 billion in equity and retaining a majority stake. The announcement sent analysts scrambling to identify who holds the real leverage in an AI buildout increasingly constrained not by capital or computing chips, but by electricity. The answer, according to a research note published Tuesday by investment bank Bernstein, may be the sprawling network of Bitcoin mining companies that have quietly accumulated more than 27 gigawatts of planned power capacity across the United States. That figure has become something of a golden ticket in Silicon Valley's race to build the next generation of AI data centers. Securing a single gigawatt of grid-connected power can take more than four years in most states -- a bottleneck that has forced hyperscalers and emerging cloud operators alike to look beyond traditional data center developers. Bitcoin miners have responded by aggressively repositioning themselves as AI infrastructure providers. The industry has announced more than $90 billion in AI-related contracts covering 3.7 gigawatts of capacity, according to Bernstein's analysis, with roughly one-third of those deals struck directly with major hyperscalers and the rest with so-called neoclouds -- the independent AI computing providers that companies like Google and Blackstone are now seeking to either partner with or replicate. Among the most prominent examples is IREN, which recently struck a deal with Nvidia valued at $3.4 billion, including a $2.1 billion equity commitment from the chipmaker tied to GPU deployment. Riot Platforms separately secured an AI colocation agreement with AMD. Core Scientific and HUT 8 have deals of their own with major cloud customers. The dynamic places miners in a strategically resilient position. Whether established hyperscalers build their own neocloud operations or continue contracting with independent providers, the underlying need for grid-connected, shovel-ready power remains -- and miners, for now, hold much of it. Bernstein currently has outperform ratings on four of those Bitcoin mining firms -- IREN ($100 price target), Riot Platforms ($25 PT), CleanSpark ($24 PT), and Core Scientific ($24 PT) -- while putting a market-perform rating on MARA Holdings ($23 PT).

Bernstein: Bitcoin Miners Gain Strategic Role in AI Infrastructure

Bernstein says miners control 27 GW of planned power and $90 billion in AI deals, giving them a strategic edge as electricity becomes the main constraint on data center growth. Bitcoin miners are emerging as an important part of the AI infrastructure supply chain because they control large amounts of power capacity and data center real estate that are increasingly difficult to secure, according to a new research note from Bernstein. Analysts Gautam Chhugani, Mahika Sapra, Sanskar Chindalia and Harsh Misra estimate that publicly traded Bitcoin miners control more than 27 gigawatts of planned power capacity and have announced more than $90 billion in AI-related agreements covering 3.7 gigawatts with hyperscalers, neocloud providers and chipmakers. An April 29 research brief from RAND said that it expects the US will add approximately 82 GW of additional net available capacity by 2030. The planned power portfolio of 11 public Bitcoin mining companies. Source: Bernstein According to Bernstein, access to electricity, rather than chips, has become the primary bottleneck for scaling AI data centers. Utility providers can take more than four years to approve new grid connections, even in data center-friendly states such as Texas. "The median waiting time to secure a GW of power is nothing less than ~50 months across states, and even in politically friendly states such as Texas, the utility is following a batch review process to navigate the interconnect queue and resource load," the analysts wrote. Growing regulatory scrutiny and local opposition to large-scale data centers are adding to those delays, giving Bitcoin miners an advantage because they already operate grid-connected sites and have experience managing high-density computing facilities. Related: The real 'supercycle' isn't crypto, it's AI infrastructure: Analyst Bernstein said Bitcoin miners are increasingly diversifying into AI infrastructure as they look for new revenue streams following the 2024 halving, which reduced mining rewards and put pressure on profit margins. The report said several miners have moved beyond their traditional focus on Bitcoin production to develop AI data centers and high-performance computing facilities. One recent example is Soluna Holdings, which reported a 58% increase in first-quarter revenue, driven primarily by its data center hosting business, while crypto mining contributed a smaller share of total sales. Bernstein has also highlighted IREN as a leading example of the shift. The firm said IREN is well-positioned to transition much of its business toward AI infrastructure following its multibillion-dollar agreements with Microsoft. IREN's partnership with Microsoft could fundamentally change its business model, according to Bernstein. Source: Bernstein