Crypto firms pivot to AI as Bitcoin rewards decline

A significant portion of the cryptocurrency industry is undergoing a structural transformation as companies that previously dedicated their resources to Bitcoin mining increasingly redirect their computing power towards artificial intelligence. This shift marks a departure from the traditional model of filling warehouses with specialised hardware to earn digital coins, moving instead towards providing infrastructure for AI systems. The transition is driven by a combination of falling rewards in the crypto sector and the massive capital expenditure required by AI companies to maintain their competitive edge in the technological race.

The impetus for this change lies in the economic realities facing Bitcoin miners. For several years, the price of Bitcoin rose sharply, prompting firms to invest heavily in large banks of powerful computers. However, the value of the cryptocurrency has slumped significantly since reaching its peak in October 2025. At that time, a single Bitcoin was valued at approximately $124,000, or £91,000. Although the price has recently rallied to around $80,000, representing an increase of nearly 30 per cent in August, many industry participants believe this recovery is insufficient to justify a return to mining. The cost of reversing the infrastructure changes made for AI is substantial, making the pivot a largely irreversible decision for many firms.

Industry analysts note that Bitcoin mining companies possess specific advantages that make them well-suited for the AI sector. These firms have years of experience in securing cheap electricity and efficiently managing large-scale data centres. Both Bitcoin networks and AI systems rely on vast arrays of powerful computers housed in such facilities. While Bitcoin computers verify transactions without a central authority and are rewarded with newly created coins, AI infrastructure requires sustained high-performance computing capabilities. This overlap in technical requirements has facilitated the transition for numerous operators.

Several prominent companies are leading this shift, including TerraWulf, Ionic Digital, Core Scientific, Iris Energy, Bitdeer, Riot Platforms, and Hut 8. These entities are increasingly diverting investment and infrastructure away from crypto mining and towards AI applications. Riot Platforms recently signed a 20-year compute deal worth $9 billion with Anthropic, a company that is spending billions of dollars on infrastructure to keep pace in the AI race. Similarly, Bitdeer, one of the largest Bitcoin miners globally, has announced a 16-year agreement to provide compute services for Anthropic.

The rebranding of these companies reflects the broader industry trend. Applied Blockchain has changed its name to Applied Digital, while TerraWulf has updated its corporate description from an infrastructure-focused Bitcoin mining company to one focusing on next-generation AI and high-performance computing. Enegix, which opened a large Bitcoin mining site in Kazakhstan in 2020, is also pivoting. Its chief executive, Yerbolsyn Sarsenov, stated that the company is moving confidently towards artificial intelligence and planning the gradual alignment of its energy and infrastructure capabilities towards AI development. Enegix is currently in active discussions with AI and high-performance computing firms and intends to transform a significant portion of its business.

Despite the high costs associated with refitting crypto mines for AI, some companies have sold portions of their Bitcoin holdings to fund the transition. Wolfie Zhao of The Energy Mag, a publication that rebranded from The Miner Mag to reflect this trend, predicts that the pivot will continue even as Bitcoin prices rise. He noted that many public miners are expected to wind down their Bitcoin mining hardware in the coming quarters. Zhao argued that once multi-gigawatt power infrastructure is retrofitted for AI or high-performance computing colocation, there is no turning back. He explained that while operators can unplug from the Bitcoin network at any time, signing long-term GPU colocation leases for 10 or 20 years provides steady revenue and a commitment to maintain infrastructure for tenants.

However, not all firms are abandoning Bitcoin entirely. Haris Basit, chief strategy officer at Bitdeer, stated that the company will continue mining Bitcoin. He suggested that many operators would ultimately pursue a dual-purpose model, where Bitcoin mining provides flexibility and interruptibility, while AI workloads offer longer-duration contracted revenues. This hybrid approach allows companies to leverage their existing infrastructure for multiple revenue streams, balancing the volatility of crypto markets with the stability of long-term AI contracts.