Core Scientific and IREN, two major Bitcoin mining firms, are significantly pivoting their business models toward artificial intelligence (AI) data center operations, signaling a major shift in the crypto mining industry as Bitcoin margins tighten.
Core Scientific announced it is expanding its Pecos, Texas site into a massive 1.5-gigawatt AI data center campus. The company expects nearly 1 gigawatt of that capacity to support leasable high-density colocation services for AI workloads. While it currently uses 300 megawatts for Bitcoin mining, Core Scientific plans to transition that capacity toward AI operations. The company has secured an additional 300 megawatts under contract and acquired over 200 acres of adjacent land for further expansion. To fund this buildout, Core Scientific plans to raise $3.3 billion through senior secured notes due in 2031, targeting expansions across Georgia, Texas, North Carolina, and Oklahoma. Despite the strategic move, the company's stock (CORZ) saw a slight pre-market decline to $20.95 after closing at $21.10.
IREN is undergoing a similar, more pronounced transformation. According to a report from wealth management firm Bernstein, IREN's future now hinges on becoming a hyperscale AI cloud operator. Bernstein maintained an "outperform" rating on IREN but slashed its price target to $100 from $125. The analysts highlighted that IREN has contracted 150,000 graphics processing units (GPUs) supporting an annualized revenue of $3.7 billion once fully deployed, with roughly half locked into a five-year deal with Microsoft. Bernstein projects IREN's AI cloud revenue will surge from just $16 million in 2025 to $1.4 billion in 2027, eventually overtaking Bitcoin mining as its primary growth driver. By 2030, analysts project $6 billion in cloud revenue, with the company sunsetting its Bitcoin mining operations. IREN's pivot is backed by a 4.5 gigawatt power portfolio with sites in British Columbia and Texas being retrofitted for AI workloads.
This industry-wide shift is driven by tightening Bitcoin mining margins due to rising power costs and a 40% drop in Bitcoin's price from its October high of $126,000. Other mining firms like MARA Holdings, Hive, Hut 8, TeraWulf, and Iren are also moving toward AI and high-performance computing services to capture more stable infrastructure revenue.
