Crypto Miners Shift Gears: AI is the New Gold Rush

  • Sergey Maga
  • 25 July, 2023 09:08
Crypto Miners Shift Gears: AI is the New Gold Rush

Crypto miners are making a strategic shift towards AI, leveraging their existing infrastructure. The price of Bitcoin is far from its 2021 peak, and the startup space is now buzzing with AI, not Web3, according to coindesk. 

High-end computer chips are in demand for both crypto mining and AI development. However, there’s a global chip shortage. This situation has led to a question: Are crypto miners pivoting to AI?

Most Bitcoin miners, using ASICs chips like the Antminer S19 Pro, can’t repurpose their hardware for AI. However, larger operations are exploring options. Texas-based crypto miner, Applied Digital, recently announced a $460 million deal to host AI cloud computing in its data center. Another Texas-based company, Iris Energy, is also making a push towards AI.

The shift to AI is seen as a way to reduce systemic risk. Mining profits correlate with Bitcoin prices, so diversifying services lessens reliance on Bitcoin. Hut 8, a cryptocurrency mining company, started its pivot early in 2022. It invested in data centers packed with Nvidia GPUs capable of performing a wider range of workloads, including AI and machine learning.

The pivot from Ethereum mining to AI is also notable. Ethereum’s switch from Proof of Work to Proof of Stake left ETH-mining equipment idle. These chips, unlike Bitcoin mining ASICs, are versatile and can be redeployed for AI/ML workloads.

In conclusion, diversification is the key for mining-focused companies. The shift to AI is not a complete pivot but a strategic move to create a broader portfolio, ensuring survival in a potential Bitcoin crash.

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