Anyone who pays attention to public markets of Bitcoin will know that artificial intelligence (AI) and business pivots to high performance computation (HPC) are fashionable among Bitcoin miners. What began as a gradual trend last year has suddenly become a commercial strategy that many main public miners in Bitcoin are exploring.
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Core Scientific, Bit Digital, Hut 8, Hive and Iren currently have commercial lines AI/HPC that generate income, while Crusoe Energy and Lancium, Cipher, Terawulf, Riot and Bitfarms are in the development or exploratory phase. With softbank, openai and others collectively compromise up to $ 500 billion to accelerate the developments of AI in the United States through the Stargate project, which was announced in January, where does the digital oil game miners leave bitcoin?
Kevin Dede, managing director of Equity Research at Investment Bank HC Wainwright, believes there is a lot of space for both. In a recent episode of the Bitcoin Securities Program of the Minera Capsule, Dede said that although it would not bet on miners who take the AI/HPC seriously, it would not underestimate the perspectives of the miners of pure game bitcoin.
Does the launch of the Stargate project change the conversation in AI Pivots for Bitcoin Miners?
I think the conversation changed when Core Scientific announced the Coreweave agreement six or eight months ago. That really changed the dynamics. Another thing that people might not consider is that Bitcoin miners can compete at different scales. Project Stargate is hyperscala facilities, but there are opportunities for lower -scale implementations.
Bitdigital and Applied Digital have shown that it does not need hyperscala to succeed. There are many customers who want access to calculate, and not all are hyperscalers.
Riot recently decided to pause his phase 2 of 600 corsican megawatts to evaluate it for AI/HPC. Why do you think they did that?
Riot has caused activist investors to buy shares, which is excellent for the price of shares. The company has always remained firm to adhere to Bitcoin Mining. In its meeting of analysts last June, CEO Jason told them they would not do HPC.
The installation of Riot Corsican is incredible. The question is: 600MW of HPC are worth more than 600MW from Bitcoin Mining? I think the answer is yes. HPC’s demand is growing and applications are evolving; We are scratching the surface. The real market is the business market, where companies use AI to optimize production.
Looking at a digital and central scientist BIT, what company strategy do you think has the greatest advantage?
Let’s start with bitdigital. They bought GPU and rented space in northern Iceland to address the needs of a client, who I think is based on somewhere in Europe, to execute models. Now, Iceland and Europe are not as close as I might think, which is important if they are executing an inference calculating, SINCUA continental would be the main client for that.
The Angum agreement arrived and secured their first place, which is about four megawatts. They also just opened another place that they hope to have energized for this summer, with the aim of five megawatts initially with plans to climb up to 35 megawatts in HPC capacity this year. Sam Topar, his CEO, often points out that this acquisition opened the door to a potential of 288 megawatts of HPC capacity.
When it comes to evaluating the risk, it is really reduced to a series of factors. Bit Digital acquired a company with a proven history of construction and operation of these sites. But, of course, that adds another risk layer beyond the risk of reference execution. You are in layers about the risk that they can stumble during the construction and operation of their next set of facilities as the year progresses.
As for Core Scientific, he would be the last person to underestimate them. They have brought a really impressive talent. I asked his CEO, Adam Sullivan, how all his plans join. He said there are many people in the world of the existing data center whose employees are seeing limited growth trajectories. So, if you are an employee of one of those companies and get an offer from Core Scientific with actions on actions, you are thinking: “My current options have a price in two digits, but this could go to two high digits or even triple digits” .
On the other hand, these new B200 chips they are using are much more powerful but also significantly more complex, and this could play in delays for the implementation of Coreweave in the Core Scientific sites. I think that a lot of that will come out in the next Core Scientific earnings call in March. They are likely to address if they are still on the way to energizing the first Installation of Choreweave Grande in the second quarter and how they have addressed these network challenges.
Do you think that the greatest advantage of AI/HPC pushes Bitcoin mining to the stripes, or can it coexist together with HPC and AI?
I don’t think Bitcoin mining will disappear. The concept of a Ai-bitcoin mining data center is interesting. HPC’s energy is not as consistent as people could assume. Do not run 7/24/365. It depends on what is happening: are they executing a new model? Are they supporting inference? Those charges of energy will fluctuate.
It is not too difficult to imagine that a host has flexibility in its energy purchase agreements (PPA) to execute Bitcoin miners when the power is not needed for HPC. It’s just a matter of adjusting the load.
When you take a step back, it seems to me that there is space for both. We have talked about Corsicana, but there are many other places such as western Texas. Mike Novogratz wants to make Helios an HPC center, but is in the middle of nowhere. He needs a private plane to get there, and is on a long trip from Lubbock. In addition, it is in wind energy, so energy is cheap, but how are you going to execute inference to that site?
What is really interesting when you look at business models is optionality. From the hybrid perspective, you have transparency. It can forecast HPC’s income and assume a certain amount of debt based on those margins. But if Bitcoin mining also maintains in operation, you have the opportunity to benefit from an ascending price of Bitcoin and improve market dynamics.
I think that optional is an opportunity that some of these new companies centered in HPC offer investors. You have that constant HPC current, and then you have the Bitcoin upward potential that reaches $ 200,000 this year. That is the intriguing proposal. For that reason, I think that many of these companies with experience in both will continue to do both.
