*

Tech giants are acquiring energy assets from bitcoin

miners

*

Data centers could use up to 9% of US electricity by

decade's

end, EPRI says

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Bitcoin miners face challenges repurposing for AI due to

high

costs and infrastructure needs

By Laila Kearney, Mrinalika Roy

Aug 28 -

U.S. technology companies are pursuing energy assets held by

bitcoin miners as they race to secure a shrinking supply of

electricity for their rapidly expanding artificial intelligence

and cloud computing data centers. Those data centers are driving

the fastest U.S. power demand growth since the start of the

millennium, outpacing grid expansions and leaving giant

technology companies, like Amazon ( AMZN ) and Microsoft ( MSFT )

, to scavenge for vast amounts of electricity.

The electricity scramble is jolting the energy-intensive

cryptocurrency mining industry. Some miners are making huge

profits leasing or selling their power-connected infrastructure

and sites to tech, while others are losing access to the

electricity needed to stay in business. "The AI battle for

dominance is a battle being had by the biggest and best

capitalized companies in the world and they care like their

lives depend on it that they win," said Greg Beard, CEO of

Stronghold Digital Mining ( SDIG ), a publicly-traded bitcoin

mining company. "Do they care about what they pay for power?

Probably not."

Data centers could use up to

9% of total electricity

generated in the U.S. by the end of the decade, more than

doubling their current consumption, as technology companies pour

funds into expanding their computing hubs, the Electric Power

Research Institute said in May.

Currently, data centers account for about 1%-1.3% of global

electricity consumption, versus crypto mining's roughly 0.4%,

according to the International Energy Agency. That disparity is

expected to grow.

Analysts expect 20% of bitcoin miner power capacity to pivot to

AI by the end of 2027. Over the past year, bitcoin miners

and AI data center owners have increasingly vied for the same

power assets and contracts, executives from over half-dozen

publicly traded U.S. crypto mining companies told Reuters.

Marathon Digital Holdings ( MARA ), the world's biggest

publicly traded bitcoin miner, was among those eyeing a

nuclear-powered data center owned by Talen Energy ( TLN ) in

Pennsylvania, two sources familiar with the situation said.

"We are always willing to talk with anyone who is looking to

sell a data center," Marathon said, without confirming specific

interest in the site. Amazon ( AMZN ), with a market capitalization of

more than 350 times the size of Marathon, bought the center in a

deal announced in March and secured enough electricity to power

nearly all the homes in New Mexico.

GROWING INTEREST Many large miners that own land and

power hookups are shifting strategies from exclusively crypto

mining to marketing their property and energy services to AI and

cloud computing businesses.

"We've gotten a lot of interest from everyone from an Amazon ( AMZN ) or

Google," said Kerri Langlais, chief strategy officer of bitcoin

miner TeraWulf ( WULF ), which has a site in upstate New York

that is capable of up to 770 megawatts (MW). The frenzy of tech

prospects for miners kicked off in June, when crypto miner Core

Scientific ( CORZ ) - fresh out of bankruptcy - became the first

to announce a major agreement to lease its power-connected

facilities to Nvidia ( NVDA )-backed CoreWeave in deals

estimated at over $6.7 billion over 12 years. Several miners

have since said they would lease, or act as subcontractors to

develop AI data centers. New data centers, which have typically

been around 20 MW, are being built up to 1,000 MW today. But

wait times to connect new power supplies in the United States

can take several years.

For crypto miners with large energy assets, repurposing their

operations for AI and cloud computing could make their

facilities as much as five times more valuable, Morgan Stanley

research showed. Buying or leasing space at a miner with at

least 100 MW of capacity can cut the wait times for a data

center to launch by about 3.5 years, saving technology companies

billions, Morgan Stanley said.

TOUGH TRANSITION

Still, the handoff of electricity supplies and infrastructure to

tech companies from crypto miners will not be seamless for most,

if at all possible, several miners said.

"Most bitcoin miners that are out there saying they are going to

do AI don't really know what they're getting into," said

CleanSpark ( CLSK ) CEO Zach Bradford, adding his company will

stick with crypto mining as its core business.

About 90% of the country's bitcoin mines can be constructed in

six to 12 months, versus three years for a more sophisticated

data center, Bradford said.

Those mines, he added, would have to be rebuilt to

incorporate specialized cooling structures and other

infrastructure to be used for AI or cloud computing.

The high costs of building AI data centers would be a barrier to

many crypto miners, who were largely barred from accessing

capital after a 2022 bitcoin price crash, said Sergii

Gerasymovych, CEO of EZ Blockchain, which supplies equipment and

services for crypto mining.

This year, EZ Blockchain had a 10-MW project in the works with a

South Carolina utility until the utility contracted for 100 MW

with a hyperscaling AI company.

Hyperscalers include the world's biggest technology

companies that operate massive global networks of data centers

and cloud infrastructure.

While the financial details of the AI data center deal were

unclear, Gerasymovych said the company he was up against had

billions of dollars of capital to play with.

"For them, it's about speed to market and they're just

throwing money around," he said. "What is there to compete

with?"