Bitcoin 'just doesn't cut it anymore': Miners' pivot to AI sends stocks soaring

Core Insights - Bitcoin miners are transitioning to service the growing demand for AI workloads, leveraging their existing resources such as land, energy, and data centers [1] - The shift is driven by the potential for better returns from AI compared to traditional Bitcoin mining, which has seen declining profitability due to market saturation and price volatility [2][3] - Major AI players and cloud hyperscalers are facing capacity constraints, creating opportunities for Bitcoin miners to fill the gap with their infrastructure [4][5] Industry Trends - The profitability of Bitcoin mining has decreased, with Jefferies analysts estimating a more than 7% decline in miner profits in September due to falling Bitcoin prices [2] - The "halving" event in Bitcoin mining reduces rewards every four years, making it less profitable over time compared to AI computing [3] - The demand for AI workloads is surging, and Bitcoin miners possess the necessary resources, such as affordable and consistent power, to support AI data centers [3] Company Dynamics - Companies like IREN, Riot, TeraWulf, and Cipher Miner are among those pivoting towards high-performance computing (HPC) and AI [1] - Bernstein analysts highlight that Bitcoin miners can significantly reduce data center deployment timelines by up to 75% due to their grid-connected power [6] - The existing infrastructure of Bitcoin miners is strategically located closer to AI data centers, allowing for cost-effective retrofitting for AI and HPC applications [6]