Bitcoin mining companies are increasingly transforming their operations into artificial intelligence (AI) data centers, creating a new revenue stream that has propelled their stock prices significantly higher, even as cryptocurrency prices decline. This strategic pivot is driven by the convergence of challenges in Bitcoin mining—including rising competition, electricity costs, and reduced profitability—with surging demand from major technology companies for ready-to-use data center infrastructure.
The core of this trend lies in the repurposing of existing mining facilities. Companies like Core Scientific, Cipher Mining, and IREN have signed long-term lease agreements with hyperscalers such as Alphabet (Google), Amazon, Meta, and Microsoft. These tech giants are seeking sites with established land, cooling systems, and long-term power contracts to rapidly expand their AI computing capacity. "The opportunity for miners to convert to AI is one of the greatest opportunities I could possibly imagine," said Adam Sullivan, CEO of Core Scientific.
The financial impact has been substantial. The CoinShares Bitcoin Mining ETF is up approximately 90% in 2025, while Bitcoin itself has erased its yearly gains. Individual company performances are even more striking: Core Scientific's shares quadrupled in 2024 after its first AI contract and are up another 10% this year, with plans to exit Bitcoin mining entirely by 2028. IREN shares peaked above $66 in November, and Hut 8 has seen a 112% gain in 2025, partly due to asset sales.
However, the transition is complex and capital-intensive. AI workloads require stronger cooling, faster networks, and the replacement of Bitcoin-specific ASIC miners with graphics processing units (GPUs). Analyst Kevin Dede of H.C. Wainwright notes, "It's more than an order of magnitude of intensity and complexity" compared to mining. Furthermore, the sector faces risks, including stretched valuations, heavy spending, and concerns over the depreciation schedules of AI infrastructure, which may not align with the chips' useful life.
Not all miners are fully abandoning Bitcoin. Some, like CleanSpark, which raised $1.15 billion for data-center expansion, are maintaining mining operations due to the unique grid flexibility Bitcoin mining offers. "If and when there's a weather-related event... we can curtail a portion of the portfolio to help stabilize the grid," explained CleanSpark CEO Matthew Schultz, highlighting a demand for such load management that AI centers cannot provide.
A potential macro consequence of this shift is a reduction in U.S. Bitcoin mining output as capacity is redirected, which could conflict with political goals of keeping Bitcoin production domestic.
