Tech giants buy energy assets from bitcoin miners EPRI says data centers may use up to 9% of U.S. electricity by end of decade Bitcoin miners face challenges repurposing to AI due to high costs, infrastructure needs Aug. 28 – U.S. technology companies are racing to secure dwindling power supplies for their rapidly expanding artificial intelligence and cloud computing data centers, and are clamoring for energy assets held by bitcoin miners. These data centers are driving the fastest U.S. electricity demand growth since the early 2000s and are outpacing the expansion of the power grid, leaving tech giants like Amazon (AMZN.O), Opens in a new tab and Microsoft (MSFT.O), Opens in a new tab scavenging for vast amounts of electricity. The scramble for power is rocking the energy-intensive cryptocurrency mining industry. Some miners are making huge profits leasing or selling their power-connected infrastructure and sites to technology companies, while others are losing access to the power they need to stay in business. “This is a battle between the world's largest and most well-capitalized companies, and they're betting their lives on winning,” said Greg Beard, CEO of bitcoin mining company Stronghold Digital Mining Inc. (SDIG.O). “Are they worried about their electricity bills? Probably not.” The National Electric Power Research Institute predicted in May that data centers could use up to 9% of the U.S.'s total electricity generation in a decade, more than double current consumption, as technology companies pour money into expanding computing hubs.
According to the International Energy Agency, data centers currently account for around 1-1.3% of global electricity consumption, while cryptocurrency mining accounts for around 0.4%, a gap that is expected to widen.
Analysts expect 20% of bitcoin miner power capacity to be converted to AI by the end of 2027. Bitcoin miners and AI data center owners have increasingly competed for the same power assets and contracts over the past year, executives from more than a half-dozen U.S. publicly traded crypto mining companies told Reuters. Marathon Digital Holdings Inc. (MARA.O), the world's largest publicly traded bitcoin miner, is among the companies eyeing a nuclear data center owned by Talen Energy in Pennsylvania, two sources familiar with the situation said. “We're always open to talking to anyone looking to sell a data center,” Marathon said, but did not confirm any specific interest in the site. Amazon, whose market capitalization is more than 350 times that of Marathon, bought the center in a deal announced in March, securing enough power to power nearly every home in New Mexico.
Growing interest Many large miners who own land and power connections are shifting from a cryptocurrency mining-only strategy to marketing their AI and cloud computing businesses to real estate and energy services.
“We're seeing interest from everyone, from Amazon to Google,” said Kelly Langlais, chief strategy officer at bitcoin miner Terrawolf (WULF.O), which has a 770-megawatt (MW) facility in upstate New York. The frenzy of the tech landscape for miners first began in June, when Core Scientific (CORZ.O), a cryptocurrency miner that had just emerged from bankruptcy, announced a major deal to lease a power-connected facility to Nvidia's (NVDA.O) CoreWeave. The contract is estimated to be worth more than $6.7 billion over 12 years. Since then, several miners have said they will lease or subcontract to develop AI data centers. New data centers, typically around 20 MW, are now being built up to 1,000 MW. But it can take years to hook up new power in the U.S.
For cryptocurrency miners with large energy assets, repurposing their operations for AI and cloud computing could make their facilities up to five times more valuable, according to a Morgan Stanley study. Buying or leasing miner space with 100MW or more capacity could cut the wait time for data centers to stand up by about 3.5 years, saving tech companies billions of dollars, Morgan Stanley said.
A tough transition
Still, the transfer of power and infrastructure from crypto miners to tech companies will likely not be seamless in most cases, if it's even possible, several miners said.
“Most bitcoin miners that say they're using AI don't actually know what they're getting into,” said CleanSpark (CLSK.O) CEO Zach Bradford, adding that the company would continue to keep cryptocurrency mining as its core business.
About 90% of domestic bitcoin mines can be built in six to 12 months, while more advanced data centers can take up to three years, Bradford said.
He added that these mines will need to be rebuilt to include specialized cooling structures and other infrastructure that can be used for AI and cloud computing.
Sergiy Gerasimovich, CEO of EZ Blockchain, a provider of crypto mining equipment and services, said the high cost of building AI data centers will be a barrier for many crypto miners who were largely barred from accessing their funds after Bitcoin's price crash in 2022.
This year, EZ Blockchain was working on a 10 MW project with a South Carolina power company, which in turn signed a 100 MW contract with the hyperscaling AI company.
Hyperscalers include the world's largest technology companies that operate large global networks of data centers and cloud infrastructure.
Financial details of the AI data center deal were not available, but Gerasimovich said the companies he is competing with have billions of dollars in capital.
“It's all about speed to market, and they're just throwing money around,” he said. “Who has the competition?”
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Reporting by Laila Kearney and Mrinalika Roy Editing by Margherita Choi
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