Foreign media published a commentary by the founder of ViaBTC and also involved in CEO, Yang Haipo, stating that an increasing number of mining companies are shifting their sites, electricity, and capital towards AI and high-performance computing. This change will raise the costs of Bitcoin mining, but it may not necessarily drive the mining industry out of the market as a whole. The article argues that what both sides are truly competing for are access to electricity and existing infrastructure.
AI places greater emphasis on high-quality electricity
The article mentions that in the second quarter, Core Scientific had a gross profit margin of -56% from its own mining operations, while its data center hosting business generated nearly 80 million US dollars in gross profit. During the same period, approximately 71% of TeraWulf's revenue came from HPC rentals. Companies that previously relied on Bitcoin mining for expansion are now shifting their sites and power resources to AI.
The author believes that one of the most scarce resources, AI, is large-scale, stable electricity that can be obtained quickly. If the land already has substations, grid capacity, and fiber optic connections, it can accommodate the load of AI more rapidly after upgrading; however, if these conditions are lacking, even if it is close to power plants, it may still take several years to complete the construction.
Idle electricity is still suitable for mining.
The article argues that AI does not pose equal competition to all power resources. Outside of the large data center scenario, the electricity consumption logic of mining is different from that of AI. Mining can make use of low-cost electricity that is time-dependent, regional, or subject to transmission limitations, whereas AI training and inference typically require a more stable power supply.
The author mentioned as an example that some small and medium-sized mining farms connect their mining machines to the rooftop photovoltaic systems of factories. The factories give priority to using electricity for production, and the surplus power is then used for mining; when power generation decreases, the mining machines can reduce their load or shut down. In such scenarios, the goal of mining is to improve the utilization rate of the surplus power, which would otherwise be difficult to monetize.
Miners will flow to low-cost regions.
The article also mentioned that Brazilian energy group ENGIE stated this year that it is evaluating the option of incorporating battery storage or Bitcoin mining facilities into its large-scale Ass ú Sol photovoltaic projects, due to grid constraints that prevent the full absorption of some solar power generation. Based on this, the author believes that wind and photovoltaic power that is subject to production limits, associated gas from oil fields, small hydropower projects in remote areas, as well as periods of negative electricity prices, may still continue to support mining activities.
The article concludes that even if large mining companies reduce their own mining operations, the mining machines will not collectively withdraw from the market as a result. Some of these devices will flow into the secondary market and be transferred to regions with lower electricity prices to continue operating. If AI continues to drive up the prices of high-quality electricity and standardized data centers, the computing power of Bitcoin is more likely to be redistributed rather than simply disappear.
