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Conventional data centers currently have power and cooling limitations.
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AI may offer more stable income streams, but would limit the hashing power of miners.
Thanks to their infrastructure, Bitcoin (BTC) Mining companies would be in a favorable position to take advantage of the demand for data centers from sectors such as artificial intelligence (AI) and high-performance computing (HPC), according to a Galaxy Research report, December 18, 2024.
The report explained that conventional data centers face limitations in energy structure, cooling and connectivityleaving them ill-prepared to meet these demands.
A transition involves significant investments and expertise, as well as redesigning existing infrastructure to support the high computational demands of AI.
According to Goldman Sachs Research, demand for data centers in the US will reach 45 GW by 2030, with a compound annual growth (CAGR) of 15% between 2023 and 2030, driven by mass adoption of AI.
The projection of growth in demand in the coming years can be seen in the following image extracted from the report from Galaxy Research.
Projection of energy demand from now to 2030. Source: GalaxyResearch.
Additionally, US bank JP Morgan projects that capital spending on large-scale AI will reach $370 billion by 2038, representing a 127% increase over estimated spending in 2024.
The following graph details what this increase in capital allocated to AI by hyperscalers (companies that require large data centers) will look like.
By 2038, $370 billion will be invested in AI. Fountain: Galaxy Research.
Bitcoin miners are prepared to corner that demand
AI data centers require liquid cooling systems to support high-power-dense hardware, low-latency networking, and increased redundancy (N+1) compared to mining centers.
Low latency networks are those designed to minimize the time it takes for a data packet to travel from its source to its destination.
Increased redundancy (N+1) refers to a network design that includes additional components to ensure service continuity in the event of failures. In an N+1 system, there is one additional component for every “N” major components, allowing the system to continue functioning even if one of the components fails.
Some Bitcoin miners already have those capabilities required energyand other utilities such as cooling systems for your hardware equipment, access to wide terrain, fiber networks and components that can be adapted to the needs of AI / HPC, Galaxy Research noted.
Researchers revealed that Equinix, one of the largest data center companies in the world, has a global network of data centers with a combined total operating capacity of 292 MW (megawatts) in 20 facilities.
In perspective with the capacity of the miners, CriptoNoticias reported at the beginning of October 2024 that Ethiopia was emerging as a country that miners were beginning to choose for their activity (due to its cheaper energy) and in a short time they had already reached 600 MW operational.
As such, miners’ existing facilities eliminate the need to build new energy infrastructure from scratch, saving time and costs to hyperscalers.
Possible benefits for Bitcoin miners
Finally, the report explained that integrating AI operations can offer more stable income streams, with predictable contracts and with less volatility than the Bitcoin mining.
Additionally, Bitcoin mining can complement AI data center operations, acting as a load balancing mechanism.
By using energy during periods of low AI demand, miners can take advantage of idle energy capacitywhich would otherwise be wasted, improving operational efficiency and maximizing the use of existing energy infrastructure.
This synergy between miners and AI industry operators would optimize shared energy infrastructure, stabilize the electrical grid and diversify the income streams of both industries.
As reported by CriptoNoticias, throughout 2024 mining companies have already begun to venture into incorporate AI within your business model. Such is the case, for example, of companies such as Core Scientific (CORZ), Hut8 (HUT), Hive Digital Technologies (HIVE) and TerraWulf (WULF).
On the other hand, a possible disadvantage that the Galaxy Research study detected is that Bitcoin miners could experience a decrease in their computing power (hashrate) to extract bitcoin from the network, due to the diversion of resources towards AI operations.
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