A recent report by VanEck highlights a potential revenue stream for Bitcoin miners struggling with financial challenges. The report suggests that if miners partially transition to provide energy for artificial intelligence (AI) and high-performance computing (HPC) by 2027, they could generate an additional $13.9 billion annually.
Financial Struggles of Bitcoin Miners
The report doesn’t shy away from addressing the financial difficulties faced by many Bitcoin miners. It bluntly states, “Bitcoin miners generally have terrible balance sheets, either because of too much debt, too much equity issuance, too much executive compensation, or all three.”
The AI/HPC Opportunity
VanEck’s analysis estimates that if publicly traded bitcoin mining companies shifted just 20% of their energy capacity to AI and HPC by 2027, the resulting additional profits could average more than $13.9 billion per year for the following 13 years.
Understanding the Potential
The report emphasizes the importance of investors understanding the potential scale of the AI/HPC opportunity for Bitcoin miners. It delves into the capital requirements and potential revenue if publicly traded miners pivoted varying percentages of their energy capacity to cater to AI & HPC customers.
Revenue Projections
Based on interviews and third-party estimates, VanEck assumes revenues of $1.30 per kWh. Applying an 80% utilization rate, the report projects an annualized revenue of approximately $9.11 million per MW.
Capital Requirements
The report also addresses the substantial capital investment required for such a transition. Borrowing from Core Scientific’s estimates, it applies a conservative $7.5 million per MW cost of conversion, resulting in a total of ~$23.1 billion for the infrastructure alone. Additionally, it estimates the need for 1,681,600 Nvidia H100 GPUs, totaling ~$54.7 billion—just for the first generation.
