Miner Core Scientific has started leasing equipment to AI startups

What’s new? One of the largest US bitcoin miners, Core Scientific, which earlier this year successfully restructured with re-entry on Nasdaq, is transforming some of its mining infrastructures to lease them to artificial intelligence startups for high-performance computing operations.

Material by Bloomberg

What else is known? Core Scientific has already deployed a 16 MW data center (DC) for startup CoreWeave Inc. and plans to increase capacity in the future.

The move comes amid a sharp drop in bitcoin mining revenue and growing demand for data centers to house graphics processing units (GPUs) to run AI applications.

Bitcoin miners earn the bulk of their revenue in the form of rewards for mining blocks, with transaction fees making up a smaller portion of their income. On April 20, the bitcoin network held its fourth halving, which cut block mining rewards in half, from 6,25 coins to 3,125 coins, resulting in a drop in average daily issuance from 900 to 450 coins.

Halving, embedded in Bitcoin’s code, occurs every four years in order to reduce inflation. It also slows down reaching the asset’s total supply limit, which is programmatically capped at 21 million coins. To date, 19 695 862 BTC have been mined. Bitcoin Luxor Mining calculates that with halving, the last bitcoin will be mined around 2140.

Some large miners, including Core Scientific, are trying to increase revenues and capitalize on the AI boom by shifting some capacity to provide services to industry companies that also require energy-intensive computing.

For example, back in the middle of last year, Canadian miner HIVE Blockchain changed its name to HIVE Digital and decided to focus on making money with AI technologies, cloud computing, and GPUs.

According to Core Scientific CEO Adam Sullivan, it will take three to four years to fully transform the 500MW bitcoin mining infrastructure to accommodate high-performance computing. “We are in regular discussion with our customer in this space and expect to build out this part of our business further over the course of the year. We aim to become a market leader and provide the digital infrastructure for high-performance computing,” the senior executive added.

The company also reported Q1 results, where it said it mined 2825 BTC worth $175 million at current prices. For all of last year, despite going through bankruptcy proceedings, Core Scientific mined 19 274 BTC, which is currently valued at $1,2 billion.

The company posted a net profit of $210,7 million in Q1, while it recorded a loss of $400 000 in the same period last year.

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Earlier, one of the largest bitcoin mining companies in North America, Hut 8, reported a 36% drop in mining volumes in April. Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf reported 6-12% declines compared to March.

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Core Scientific (CORZ) shares are trading at $3,48, having added 2,96% overnight. At the same time, their value has fallen 37,3% since the beginning of the year.