Anyone who pays attention to the Bitcoin’s public miner markets will know that artificial intelligence (AI) and business pivots in the High Performance Compute (HPC) are all angry with Bitcoin miners. Beginning as a gradual run last year suddenly became a business approach that many Bitcoin’s Bitcoin miners were exploring.
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Core Scientific, Bit Digital, Hut 8, Hive and Iren currently have business lines forming AI/HPC, while Crusoe Energy and Lancium, Cipher, Terawulf, Disturbance and Bitfarms is in the exploratory stage. In Softbank, Openai and others collectively promise up to $ 500 billion to accelerate AI development in the United States by The Stargate projectannounced in January, which digital oil rush leaves pure-played Bitcoin miners?
Kevin Dede, a managing director of Equity Research at Investment Bank HC Wainwright, thinks there is plenty of room for both. In a recent phase In the Bitcoin stock show of Mining Pod, Dede declared that while he would not say hello to miners seriously about the AI/HPC, nor did he underestimate prospects for pure-play Bitcoin miners, either.
Did the launch of the Project Stargate change the conversation with AI pivots for Bitcoin miners?
I think the conversation changed when the core scientific announced the Deal of coreweave Six to eight months ago. That really moved the dynamic -new. Another thing that people can’t consider is that bitcoin miners can compete with different scales. Project Stargate is about hyperscale facilities, but there are opportunities for smaller size implementation.
Bitdigital and applied digital showed that you no longer need hyperscale to succeed. Many customers want to access to calculate, and not all of them are hyperscalers.
Riot recently decided to pause 600-megawatt Corsicana Phase 2 to check it out for AI/HPC. Why do you think they did that?
Riot had an investor activist who bought stock, which was great for stock prices. The company always agrees about the attachment to bitcoin mining. At their Analyst meeting in June, CEO Jason Les said they would not do the HPC.
The Corsicana Facility of the Riot is amazing -amazing. The question is: Does the 600mw of HPC cost more than 600mw of Bitcoin mining? I think the answer is yes. The demand for the HPC is growing, and the applications are emerging; We just scratched the top. The real market is the business market, where companies use AI to optimize production.
Looking at the bit digital and primary scientific, which approach of the company do you think has the most upside down?
Let’s start with bitdigital. They buy GPUs and rented spaces in northern Iceland to meet the needs of a customer, which I think is based somewhere in Europe, to run models. Today, Iceland and Europe are not as close as you can imagine, which is important if they run a compute sincurity Mainland Europe will be the main customer for it.
The Deal of ENOVUM They arrived and secured their first site, which was about four megawatts. They also opened another site that they expected to boost this tag, aimed at five megawatts in the first with plans to measure up to 35 megawatts in the HPC capacity this year. Sam Tapar, their CEO, often pointed out that this acquisition opened the door with a potential 288 megawatts of HPC capacity.
When it comes to risk assessment, it actually decreases with a number of factors. Bit Digital captures a company with a proven building track record and operation of these sites. But, of course, adding another layer of risk beyond the risk of baseline implementation. You are at risk that they can stumble during the construction and operation of their next set of facilities as the year grows.
As for the main scientific, I will be the last person to underestimate them. They brought some really wonderful talent. I asked their CEO, Adam Sullivan, about how all their plans would come together. He said many people in the existing world of data center that employees see limited growth trajectories. So, if you are an employee in one of those companies and you get an offer from the main scientific with stock options, you think, “my current options are priced at a double number, but It can go to a high double number or even triple digit.
On the other hand, the new B200 chips they use are stronger but more significantly more complicated, and they may play with delays for coreweave implementation on scientific core sites. I think many of these will appear in the next core scientific revenue call in March. They are likely to discuss whether they are still on the track to stimulate the first big coreweave facility in the second quarter and how they can attach the networking challenges.
Do you think the more reversal of the AI/HPC drives bitcoin mining to pendants, or can it be together next to HPC and AI?
I don’t think Bitcoin mining is leaving. The concept of a hybrid AI-bitcoin mining data center is interesting. The use of HPC power is not the same as people can assume. It does not run 24/7/365. It depends on what’s going on – do they run a new model? Do they support Frustration? The power loads will change.
It is not very difficult to imagine a host flexible in their electric (PPA) purchase agreements to run Bitcoin miners when power is not required for HPC. This is just a matter of repairing the load.
When you retreat, it seems like there is a room for both. We talked about Corsicana, but there are many other sites like those in West Texas. Mike Novogratz wants to make the HPC a HPC center, but it’s in the middle. You need a private plane to get there, and it’s a long trip from the lubbock. Also, it’s in the wind, so energy is cheap, but how can you run in understanding from that site?
What is really interesting when you look at business models is the optionality. From a hybrid perspective, you have transparency. You can guess HPC revenue and assume a certain amount of debt based on margins. But if you also maintain bitcoin mining, you have the opportunity to benefit from a rising bitcoin price and improving the dynamic market.
I think the optionality is an opportunity that some of the newer HPC-focused companies offer investors. You get the stream of HPC stream, and then you have the potential reversal of Bitcoin that hit $ 200,000 this year. That is the intriguing proposal. For that reason, I think many of these companies with the same experience will continue to do the same.
