Bitcoin miners are facing intense competition from artificial intelligence (AI) data centers for access to cheap electricity, leading to rising operational costs, shrinking profit margins, and a shift in the global distribution of Bitcoin's hashrate. This trend is fundamentally altering the economics of Bitcoin mining and challenging the industry's traditional role as a flexible buyer of surplus grid power.
The core issue stems from the vastly different economic models. Industry estimates indicate AI workloads can generate approximately $25 per kilowatt-hour, while Bitcoin mining earns closer to $1. When utilities choose between a flexible Bitcoin miner and a 24/7 AI customer with a firm, long-term contract, the financial incentive is clear. This is evidenced by data from Texas, where large-load power requests surged to 226 gigawatts in 2025—nearly four times the previous year—with about 73% originating from AI data centers, not miners.
The financial pressure on miners is severe. One miner's case study revealed that running 27 ASIC devices yielded a monthly revenue of about $4,800 (~0.053 BTC), but after electricity and hosting costs, net profit was just over $1,000. This squeeze is reflected in broader metrics; in December 2025, Bitcoin miners generated an average daily revenue of $38,700 per exahash per second (EH/s), down 32% year-over-year, with profitability at record lows when factoring in rising energy prices.
This economic reality is forcing a strategic pivot. Major mining firms like Galaxy Digital, CleanSpark, and IREN are converting mining sites into AI facilities. Hut 8, which owns an 80% stake in the Trump family-backed American Bitcoin firm, is increasingly positioning itself as an energy infrastructure company and has partnered with AI firm Anthropic. Bitfarms has announced plans to exit mining entirely by 2027.
The competition is also reshaping the global hashrate landscape. According to a report from BlocksBridge Consulting, North American mining pools (including Foundry USA, MARA Pool, and Luxor Technologies) saw their collective block share decline from over 40% in January 2025 to 35% by December. This decline occurs despite former President Donald Trump's 2024 campaign call for all remaining Bitcoin to be mined in the U.S.
"Every Bitcoin miner has a fiduciary responsibility right now to evaluate the feasibility of AI for any of their current power assets," said Nick Hansen, CEO of Luxor Technology. "The AI demand is just so high that it just kind of dwarfs Bitcoin mining in terms of scale and potentially scope."
Researchers point to a resurgence of mining activity in regions like China's Xinjiang province—despite an official ban—as well as in the Middle East and Russia, contributing to the shift away from North American dominance. This is partly enabled by massive energy infrastructure build-outs in these regions. "You can use the proliferation of Bitcoin mining as a proxy to the energy infrastructure within a country," Hansen noted.
The long-term implications involve network health and decentralization. As smaller miners are forced offline due to higher costs, hashrate consolidates among larger players with better power contracts, increasing concentration risk. While the Bitcoin network will adjust its mining difficulty, the transition could be painful and alter the geographic and economic decentralization that has been a hallmark of the network.
