As crypto mining profits shrink due to falling energy costs, the shift of cryptocurrency mining companies toward AI and high-performance computing (HPC) infrastructure services has become a clear trend. Miners are leveraging their existing advanced computing power and energy infrastructure to explore new opportunities in the rapidly growing field of artificial intelligence.

The latest report from TheMinerMag shows that the cost of mining Bitcoin in the second quarter of 2025 is expected to exceed $70,000, up about 9.4% from $64,000 in the first quarter. With mining revenues declining after the Bitcoin halving, mining companies urgently need to diversify.

In April 2024, the fourth Bitcoin halving quietly reset the rules of the game for miners. The reward per block fell from 6.25 BTC to 3.125 BTC. Maintaining the original model means paying for energy costs and equipment upgrades. Mining profitability dropped from an average of about $0.08 per day (per terahash/second) to $0.055 per day (per terahash/second).

After the halving, profit margins became even tighter. The cost of mining Bitcoin is higher than ever before, and many miners have realized that the old model-mine, sell, repeat-is no longer viable. Some have found they already possess the foundation for transformation: facilities built for power-hungry machines. They have begun repurposing their infrastructure for AI computing.

The Transformation Trend

Core Scientific took the lead with a high-profile move. In June 2024, it signed a 12-year, $3.5 billion GPU infrastructure hosting agreement with AI cloud provider CoreWeave. This is one of the largest AI hosting deals in history. The contract provides Core with long-term revenue largely independent of Bitcoin prices and has quietly sparked competition in the mining sector.

Riot has taken similar steps. In January 2025, Riot suspended its 600 MW Bitcoin mining farm expansion plan in Corsicana and began reselling the site to hyperscale data centers and AI companies. The company shifted from expanding the hash rate to seeking AI tenants.

On August 11, MARA Holdings (MARA.US) announced it would acquire a 64% stake in Exaion, a technology subsidiary of French power company EDF, for $168 million in cash. Under the agreement, MARA can choose to invest an additional $127 million to increase its stake to 75%. EDF will retain a minority interest. The acquisition aims to expand MARA's presence in the AI infrastructure sector.

The latest example is TeraWulf (WULF.US), which signed two ten-year agreements with Fluidstack to provide HPC clusters to major cloud service providers. Under the agreements, TeraWulf will use its Lake Mariner Data Center campus in western New York to deliver over 200 MW of critical IT load. The agreements have a total contracted revenue of $3.7 billion, which could rise to $8.7 billion if two five-year renewal options are exercised.

Google has agreed to invest $1.8 billion to support the project's construction, including project-related debt financing. As consideration, Google will receive warrants to purchase approximately 41 million shares of TeraWulf common stock, equivalent to an 8% equity stake.

Currently, most miners are still mining Bitcoin. But it is no longer their only business. It is just one of many revenue streams, which in the future may include AI hosting, GPU leasing, energy brokerage, and even sovereign-level computing infrastructure.

It is still too early to judge whether miners' shift toward AI will succeed, as there is too little data. Although the HPC business has not yet fully scaled for all miners, the per-megawatt profit margin for AI computing is significantly higher than for mining. Iris Energy's AI services revenue grew from negligible levels to $2.2 million in June 2025. This relatively new business unit has a profit-to-revenue ratio of 98%, compared with 75% for the mining business.

Who Will Be the Next CoreWeave

These companies hope to emulate the success story of CoreWeave (CRWV.US)-once a small mining company, now a major AI computing provider. In its second-quarter 2025 earnings report, CoreWeave's revenue more than doubled year-over-year to $1.21 billion, with a valuation of $48 billion.

After securing Google's investment, TeraWulf's stock surged nearly 60% in a single day, bringing its market capitalization to $3.4 billion. In its latest research report, investment bank Clear Street called these agreements "transformational," "significantly enhancing its position as a leading hyperscale AI/HPC infrastructure provider."

The firm wrote that project execution and funding still require "close monitoring," but the agreements "significantly improve visibility into growth and profitability."

JPMorgan believes that CleanSpark (CLSK.US), Riot (RIOT.US), and IREN (IREN.US) could all enter the HPC customer service space in the future. The bank named CleanSpark its top pick among Bitcoin miners and raised its target price to $15.

While JPMorgan's analysts acknowledge Riot's potential to expand into HPC services and diversify revenue beyond crypto mining, they remain cautious due to uncertainty over the transition timeline.

In late July, the bank upgraded MARA (MARA.US) to "Overweight," saying its hash rate target is not fully reflected in the stock price. Although MARA's adjusted EBITDA in Q2 rose tenfold to $808 million, it still relies heavily on Bitcoin price fluctuations. The company hopes to use Exaion's HPC data center and cloud service capabilities to tap into the AI computing market, which has an average annual growth rate of 25%, reducing its dependence on crypto market volatility.

The core driving force behind the mining industry's strategic shift toward AI/HPC infrastructure services is the search for diversified profit models-as proven by the success of CoreWeave, whose valuation soared to $48 billion after transformation, with quarterly revenue exceeding $1.2 billion. Capital market reaction has also been positive: after Google invested in TeraWulf, its share price jumped 60% in a single day. As traditional miners accelerate their transformation into AI computing service providers, whether they can turn their infrastructure advantage into sustainable profitability will be the key watershed for companies to survive across cycles.