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Bitcoin Miners Are Attractive Partners to Build Artificial Intelligence Data Centers: Bernstein

Jul 9, 2024
    Bitcoin miners have secured ample power supplies and operating capabilities and can help companies build AI data centers, the report said.Bernstein initiated coverage of miners Iris Energy and Core Scientific with outperform ratings.The broker remains a bitcoin bull and forecasts the token reaching $200,000 by 2025, $500,000 by 2029 and more than $1 million by 2033.
As a seasoned crypto investor with a keen interest in the latest industry developments, I find Bernstein’s report on Bitcoin miners and their potential role in building AI data centers to be an intriguing development. The fact that miners have secured ample power supplies and operating capabilities makes them attractive partners for companies looking to build AI data centers.Bitcoin miners, with their abundant power resources and mining expertise, make alluring collaborators for constructing AI data centers according to a research note published by investment bank Bernstein on Tuesday.
The latest AI-related transactions, such as Core Scientific’s 12-year contract with CoreWeave and Coatue Management’s $150 million investment in Hut 8, have significantly fueled momentum within the industry, according to the report.

As an analyst, I’m initiating coverage on two stocks: Iris Energy (IREN) and Core Scientific. I’ve set an outperform rating for both, with price targets of $26 for Iris Energy and $17 for Core Scientific. Currently, Iris Energy is trading at around $13.40, while Core Scientific is at roughly $9.79 in early trading on Tuesday.

Bitcoin mining operations currently command access to approximately 6 gigawatts (GW) of power, with plans to increase this capacity to as much as 12 GW by 2027, according to the report. These miners hold a prominent position in the “large energy grid connection lineup,” enabling them to expedite the process for prospective allies seeking to secure energy resources.

Bitcoin data centers make excellent choices for retrofitting because of their powerful rack setups, advanced cooling systems, and overall data center functionalities, according to analysts headed by Gautam Chhugani. They further projected that around 20% of bitcoin mining’s power capacity could be redirected towards artificial intelligence (AI) by the end of 2027.

The five biggest American Bitcoin mining companies are projected to persistently increase in size and could eventually represent approximately one quarter of the total Bitcoin computational power worldwide, according to Bernstein’s analysis. This measure, known as hashrate, is a significant indicator of competition within the industry and the level of mining complexity. There’s also a potential mid-term shift for these companies towards artificial intelligence.

As a researcher studying the cryptocurrency market, I’ve come across the perspective of a broker who remains bullish on bitcoin. This optimistic outlook predicts the price reaching $200,000 by 2025, $500,000 by 2029, and surpassing $1 million by 2033. Following the successful debut of U.S. spot bitcoin ETFs in January, their conviction in this prediction has grown even stronger.

Read more: Private Equity Giants Are Circling Bitcoin Miners on AI Allure

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2024-07-10 11:49