Hut 8, CleanSpark, and MARA rallied between 3% and 7% while Bitcoin and the Nasdaq fell. Hut 8 signed a second 15-year lease for 352 megawatts of AI capacity at its Beacon Point campus, bringing contracted capacity there to 704 megawatts. IREN announced another $2.8 billion of AI cloud contracts.
I have written before that this trend may age poorly. Bitcoin mines and AI data centers both consume enormous amounts of power. Their infrastructure and economics diverge quickly after that. Bitcoin mining can tolerate interruptions, flexible loads, sparse staffing, and relatively simple facilities. AI compute requires expensive cooling, redundant fiber, strict uptime commitments, specialized equipment, and a much more complicated operating organization. The CapEx per MW is 10:1 more expensive for AI.
This reminds me of the post-COVID commercial real estate owners who claimed empty office buildings could easily become apartments. On PowerPoint, unused square footage is unused square footage. In reality, the plumbing, windows, floor plates, permitting, and construction costs destroyed the conversion economics. Converting a bitcoin mine into an AI data center risks becoming the same story with transformers and GPUs.
Some miners genuinely own scarce power, valuable interconnection rights, and bankable long-term contracts. They may create enormous value. Others will add “AI” to the investor deck, spend heavily on conversion, and pray that today’s insane demand for AI stonks lasts another decade. Remember the Long Island Iced Tea Blockchain story?
When the AI bubble cools and the bitcoin price runs, I expect some of these businesses to pivot back.