Author: Nancy, PANews
Cryptocurrency assets continue to weaken, placing increasing survival pressure on crypto mining companies. To seek new growth trajectories, more mining firms are accelerating their entry into the AI sector—a transition narrative that has quickly gained favor with capital markets, leading to significant stock price increases for many, even reaching all-time highs.
However, while AI businesses have injected new growth potential for mining companies, the massive capital expenditures, ongoing financial investments, and lengthy return cycles involved are pushing these firms into another battle of capital consumption. Amid ongoing pressure on the profitability of mining operations, this bold pivot toward AI is testing mining companies’ financial strength and execution capabilities.
Stock prices have significantly outperformed Bitcoin, and mining company valuations are entering a phase of divergence.
Mining companies are transitioning into the role of compute power landlords in the AI era.
As the profitability of Bitcoin mining continues to shrink, with some mining companies even facing losses, the surge in AI has driven a sharp increase in global demand for data centers, power resources, and GPU computing power. An increasing number of mining companies are accelerating their transition into AI infrastructure to seek new growth trajectories.
For mining companies, this transition offers inherent advantages. Long accustomed to meeting large-scale mining demands, these companies have already accumulated key assets such as abundant electricity resources, land reserves, substation connectivity, and mature cooling and heat dissipation systems. In contrast to data center operators starting from scratch, mining companies can quickly enter the AI infrastructure market by upgrading their existing facilities, meeting AI computing demands at lower costs and in shorter timeframes.
Since last year, mining companies have significantly accelerated their transition to AI. Some miners have decisively downplayed or exited traditional mining operations, fully shifting to AI computing power and data center operations; others have retained a portion of their mining equipment business but gradually reallocated resources and capital expenditures toward the AI sector. Today, several mining companies have become key players in AI infrastructure development.
From a transition timeline perspective, companies such as CoreWeave, Applied Digital, and Bitdeer began investing in AI computing and data center operations as early as 2022 to 2023, making them among the industry’s earliest adopters. In contrast, mining companies like Iris Energy, Terawulf, Hut 8, Riot Platforms, and Bitfarms began significantly expanding their AI infrastructure in 2025, coinciding with the rapid expansion phase of the AI industry.
From a stock performance perspective, the market has shown strong recognition of the mining companies' AI transformation narrative. Since the beginning of the year, the average gain among 11 mining companies has reached 75.97%, significantly outperforming Bitcoin over the same period, with most posting new all-time highs following their transitions. Notably, Bitfarms (129.62%), Hut 8 (131.87%), Terawulf (118.68%), and Riot Platforms (93.71%) have delivered particularly strong results, benefiting from this round of AI infrastructure revaluation.
From a market capitalization perspective, mining companies have clearly diverged. As a representative of successful transformation, CoreWeave has reached a market cap of $62.855 billion, far surpassing other mining firms and becoming a new valuation benchmark for the industry. Iris Energy, Terawulf, Hut 8, Applied Digital, and Riot Platforms form a second tier with market caps between $10 billion and $20 billion. Meanwhile, companies such as MARA Holdings, Core Scientific, Bitdeer, CleanSpark, and Bitfarms remain in the sub-$5 billion range. This divergence stems not only from first-mover advantages but also from the market’s differentiated pricing based on each company’s execution capability in AI strategies, customer resources, and progress in data center deployment.
However, from a fundamental perspective, most mining companies are still in the heavy investment phase of their AI transition. Although many mining companies reported revenue growth in their latest quarterly earnings, overall profitability remains under pressure. On one hand, volatility in the value of their cryptocurrency investment portfolios has weighed on profit performance; on the other hand, the construction of AI data centers requires substantial capital expenditures, with rising costs for power expansion, infrastructure development, and procurement of equipment such as GPUs, driving operating expenses higher and leaving most mining companies still in a loss-making position.
Notably, despite widespread pressure on financial performance, the stock prices of related mining companies have risen significantly, indicating that the market's current focus is not on short-term profitability, but rather on the growth potential of mining companies as operators of next-generation computing infrastructure.
The battle for mining companies' survival intensifies, but AI transformation still faces multiple hurdles.
The downturn in the Bitcoin market is making the operating environment increasingly difficult for mining companies.
According to Capriole Investments, as of June 18, the average production cost of Bitcoin was approximately $63,707, with electricity costs accounting for about $50,965, leaving miners with a profit margin of only 17.45%. Over the past 30 days, miner profit margins have contracted by 47.8%. Meanwhile, data from the Luxor Hashrate Index shows that as of June 18, the daily return per 1 TH/s of hashing power had dropped to $0.032, a significant decline from $0.053 a year earlier.
As mining rewards continue to shrink, many mining companies are forced to sell Bitcoin to maintain cash flow, further intensifying the survival pressure on small and medium-sized miners, with mining resources accelerating toward dominant players. Currently, the three largest mining pools—Foundry USA, AntPool, and F2Pool—collectively account for 59% of the network’s hashrate market share. In comparison, in 2022, the top three Bitcoin mining pools combined held only 44% of the hashrate market share.
Although traditional mining operations have struggled, the explosive growth in demand for AI data centers is prompting the market to reassess the value of mining companies. VanEck’s latest research report highlights that the most valuable assets of mining companies are not their mining hardware, but rather their access to electricity, substation connectivity, land reserves, and data center infrastructure—precisely the core resources currently in shortest supply by the AI industry. Since AI clients are willing to pay significantly higher electricity rates and rents than traditional mining operations, AI infrastructure is poised to become the primary growth engine for mining companies over the next decade.
According to a report by research firm Bernstein, hyperscale cloud providers, AI cloud services, and chip companies have announced over $90 billion in AI infrastructure partnerships, involving approximately 3.7 GW of power capacity. Securing power resources has become the core of competition in AI infrastructure, with Bitcoin mining companies collectively controlling over 27 GW of planned power capacity. In some parts of the United States, the lead time for connecting 1 GW of new power capacity can reach up to 50 months, making existing mining facilities important potential sites for AI data center expansion.
However, the AI transition is far from an easy path. VanEck notes that the current market remains in the early stages of the AI transition, with company valuations primarily measured by gross energized power. Mining companies with signed AI leases generally receive higher valuation premiums, while projects still in the planning phase struggle to gain market recognition. Over time, industry valuation logic will gradually shift from “power capacity” to “project delivery capability,” ultimately returning to core metrics such as cash flow, return on capital, and tenant quality. Currently, only about 25% of contracted capacity has been delivered; the ability to complete AI data center construction on time and within budget will be a critical factor in determining company valuations.
VanEck also emphasized that the quality of AI tenants will directly impact the valuation of mining companies. Customers such as Microsoft, Amazon, and Google, as large-scale cloud providers, can generate more stable cash flows and lower financing costs, whereas smaller GPU cloud service providers correspond to higher operational risks and capital costs.
The substantial capital investment required for this transition is also testing the financial strength of mining companies. VanEck expects that the shift to AI infrastructure will still entail massive capital expenditures, with a short-term funding gap of approximately $50 billion and long-term capital needs potentially reaching $221 billion.
Under significant financial pressure, many mining companies have begun raising capital through various means. For instance, mining firms such as Iris Energy, TeraWulf, Bitfarms, and CleanSpark have raised funds by issuing convertible bonds, attracting investors with lower coupon rates and future equity conversion potential. Meanwhile, companies like Core Scientific, Terawulf, MARA, Bitdeer, and Riot Platforms have opted to sell or even liquidate portions of their Bitcoin reserves to continuously fund their AI transitions.
In addition, many mining companies have begun securing future revenue by entering into long-term contracts for AI or high-performance computing (HPC), thereby obtaining project financing and reducing overall operational risk. For example, CoreWeave has reached a $6 billion AI cloud services agreement with Jane Street; IREN has secured a $9.7 billion AI cloud computing contract with Microsoft; Hut 8 has signed a data center leasing agreement worth $9.8 billion; and Bitdeer is collaborating with Norway’s DCI to build the country’s largest AI data center project.
For mining companies, AI currently offers a development path far more imaginative than traditional mining operations. However, this transformation is not merely a switch from mining to selling computing power—it is fundamentally a long-term competition centered on capital, resources, and execution capability.