VanEck sees a $38 billion opportunity for Bitcoin miners using AI

Asset management firm VanEck predicts that bitcoin miners could unlock up to $38 billion in revenue by shifting 20% ​​of their operations to artificial intelligence (AI) and high-performance computing (HPC).

The firm believes that miners can leverage their advanced hardware and cooling systems to meet the growing demand for AI data centers.

How AI Pivot Benefits Bitcoin Miners

With vast data centers and significant power resources in the US, Bitcoin mining companies are well placed for computer-based AI tasks. This infrastructure is critical to AI operations, whose facilities are in high demand by companies in the AI ​​industry.

Van Eyck in 2011. If miners allocate 20% of their energy capacity to AI and HPC by 2027, they could increase annual profits by an average of $13.9 billion over 13 years. This contrasts sharply with the group's current net income, which is -$335 million from last year.

After factoring in a 17% discount, we estimate the total value of this opportunity to be ~$37.6 billion, compared to the total market value of the 12 companies under estimation, which stands at ~$19.7 billion. August 12, 2024,” the firm added.

Read more: AI in Finance: Top 8 Artificial Intelligence Use Cases for 2024

The asset manager highlights that entering the AI/HPC sector could help Bitcoin miners improve their financial health. Typically, these companies struggle with weak balance sheets due to excessive debt, stock offerings, or high executive compensation.

However, many have been restructured during bear markets, and AI/HPC customers are often willing to support capital expenditures. This can lower capital costs for miners and help negotiate better energy supplies.

In addition to generating immediate revenue, VanEek believes that forays into AI/HPC could double the value of mining stocks. Preliminary data indicates that miners engaged in HPC such as Core Scientific and TeraWulf are outperforming those without AI/HPC strategies such as Marathon Digital and Riot's Platform.

Read more: How Much Electricity Does Bitcoin Mining Use?

In particular, Core Scientific and TeraWulf outperformed Bitcoin year-over-year due to their focus on AI/HPC revenue streams.

“As the integration between Bitcoin mining, AI/HPC, and power grids matures—in an increasingly energy-abundant, technologically advanced regulatory environment—we believe that miners in the MarketVector Digital Asset Equity Index should collectively be able to easily double. By 2028, market capitalization, though Assuming no growth in bitcoin profits,” Van Eyck concluded.