Cryptocurrency mining companies are continuously transforming into AI computing power arms dealers. Who will be the next Core Scientific, Inc.?

The Zhitong Finance APP noted that as the profits from cryptocurrency mining shrink due to declining energy costs, it has become a clear trend for cryptocurrency mining companies to transition to AI and high-performance computing (HPC) infrastructure services. Miners are leveraging existing advanced computing capabilities and energy infrastructure to explore new opportunities in the rapidly growing AI sector.

The latest report from TheMinerMag shows that the cost of Bitcoin mining is expected to exceed $70,000 in the second quarter of 2025, an increase of about 9.4% from $64,000 in the first quarter. With the reduction in mining rewards after the Bitcoin halving, mining companies urgently need to diversify.

In April 2024, the fourth Bitcoin halving quietly reset the game rules for miners. The reward for each block dropped from 6.25 BTC to 3.125 BTC. Maintaining the original model means paying energy costs and upgrading equipment. The profitability of mining has declined from an average of about $0.08 per day (1 terahash/second) to $0.055 per day (1 terahash/second).

After the halving, profit margins are tighter. The cost of mining Bitcoin is higher than ever, and many miners realize that the old model—mine, sell, repeat—is no longer viable. Some miners have found that they already have the foundation for transformation: facilities built for high-energy-consuming machines. They are beginning to repurpose their infrastructure for AI computing.

Transformation Trend

Core Scientific took the lead with a high-profile move. In June 2024, it signed a 12-year, $3.5 billion GPU infrastructure hosting agreement with AI cloud provider CoreWeave. This is one of the largest AI hosting deals in history. The contract provides Core with a long-term revenue source that is almost unrelated to Bitcoin prices, also sparking a quiet competition in the mining sector.

Riot has also taken similar actions. In January 2025, Riot suspended its expansion plans for its 600-megawatt Bitcoin mining facility in Corsicana and began reselling the facility to hyperscale data centers and AI companies. The company shifted from expanding computing power to seeking AI tenants.

On August 11, MARA Holdings (MARA.US) announced it would acquire a 64% stake in Exaion, a technology subsidiary of Electricité de France (EDF), for $168 million in cash. Under the agreement, MARA also has the option to invest an additional $127 million to increase its stake to 75%. EDF will continue to hold a minority shareholder position. This acquisition aims to expand MARA's business layout in the AI infrastructure sector.

The latest example is TeraWulf (WULF.US), which signed two ten-year agreements with Fluidstack to provide high-performance computing clusters for large cloud service providers. According to the agreements, TeraWulf will utilize its Lake Mariner data center campus in western New York to deliver over 200 megawatts of critical IT load. The total contract revenue amounts to $3.7 billion, and if both five-year renewal options are exercised, the total contract value will increase to $8.7 billion Google has agreed to invest $1.8 billion to support project construction, which will be used for project-related debt financing. In exchange, Google will receive warrants to purchase approximately 41 million shares of TeraWulf common stock, equivalent to an 8% equity stake.

Currently, most miners are still mining Bitcoin. However, this is no longer their only business. It is just one of many sources of income, which may include AI hosting, GPU leasing, energy brokerage, and even sovereign-level computing infrastructure in the future.

It is still too early to determine whether miners' shift to AI has been successful, as there is too little data. Although the high-performance computing (HPC) business has not yet fully expanded to all miners, the profit margin per megawatt for AI computing is significantly higher than that of mining. Iris Energy's AI service revenue grew from negligible amounts to $2.2 million by June 2025. This relatively new business segment has a profit margin of 98%, while the profit margin for mining operations is 75%.

Who will be the next CoreWeave

These companies hope to emulate the success of their peer CoreWeave (CRWV.US) — CoreWeave was once a small mining company that has now transformed into a significant AI computing provider. In its Q2 2025 financial report, CoreWeave's revenue doubled year-on-year to $1.21 billion, with a valuation of $48 billion.

After Google took a stake in TeraWulf, its stock price surged nearly 60% in a single day, bringing its market capitalization to $3.4 billion. Investment bank Clear Street stated in its latest research report that these agreements are "transformative agreements" for TeraWulf, "significantly enhancing its position as a leading provider of hyperscale AI/high-performance computing infrastructure."

The company noted that project execution and funding still need "close monitoring," but these agreements "significantly improve the visibility of growth and profitability."

JP Morgan believes that CleanSpark (CLSK.US), Riot (RIOT.US), and IREN (IREN.US) may all engage in HPC customer services in the future, with CleanSpark being listed as the preferred Bitcoin mining company and its target price raised to $15.

While the bank's analysts recognize Riot's potential to diversify its income beyond cryptocurrency mining by expanding into HPC services, they remain cautious due to uncertainties in the transformation timeline.

Morgan Stanley upgraded MARA (MARA.US) to "overweight" at the end of July, believing that its computing power targets are not fully reflected in the stock price. Although MARA's adjusted EBITDA increased tenfold to $808 million in Q2, it remains heavily reliant on price fluctuations. The company hopes to enter the AI computing market, which is growing at an annual rate of 25%, through Exaion's HPC data center and cloud service capabilities, reducing the impact of cryptocurrency volatility.

The core driving force behind the strategic shift of mining companies towards AI/HPC infrastructure services is the pursuit of diversified profit models — as validated by the successful example of CoreWeave, whose valuation skyrocketed to $48 billion after its transformation, with quarterly revenue exceeding $1.2 billion The response from the capital markets was equally positive: TeraWulf's stock price surged 60% in a single day after receiving investment from Google. As traditional miners accelerate their transformation into AI computing power service providers, whether they can convert their infrastructure advantages into sustainable profitability will become a key watershed for companies to navigate through cycles