Presented by Fractal Bitcoin

Welcome to Mining Wednesday, where Blockspace covers the intersection of bitcoin mining, energy, and AI.

Bitcoin miners are pivoting. We sat down with two of the larger entrants to the AI/HPC arms race with Cipher Mining’s Tyler Page and Chris Totin and TeraWulf’s Nazar Khan.

They’ve garnered investments and projects from SoftBank and Core42, respectively, so its safe to say we can trust there opinions on the matter.

Plus, a peak into Antalpha’s stellar Q1 and Tether’s stake in the newly public bitcoin lending firm.

It’s about a 5 minute read. But before we dig in…

Market Opens

Can bitcoin miners use AI bottlenecks to their advantage?

Nothing stops this trAIn.

When Core Scientific announced its landmark AI/HPC deal with CoreWeave in June last year, it joined Hut 8 and Hive as one of the few public bitcoin miners with an incipient AI business line.

Fast forward a year, and now AI/HPC pivots are the rule – not the exception – for public miners. Out of all the leading public miners, only Cleanspark, MARA, BitFuFu, and Cango haven’t made the leap into AI. 

For those flocking to AI, it’s easy to see why. These companies could earn anywhere from $1-4 million/MW/year hosting infrastructure for hyperscalers, or if they were to run the equipment themselves, they could bag more than $10 million/MW/year. 

Core Scientific’s $10 billion deal with CoreWeave, for example, is projected to net the company $1.4 million/MW/year according to the contract’s 12-year term for 590 MW of critical IT load. Compare that to the $1.1 million/MW/year that an S21 can earn at current hashprice levels.

“There's no question that the CoreWeave–Core Scientific deal last year was a shot across the bow to a lot of people — to think about, wow, there's probably something more to investigate here,” Cipher Mining CEO, Tyler Page, said on a recent Mining Pod.

And that’s not just because the money is good (and that, unlike the volatile bitcoin mining industry, the income is much more stable). It’s also because there’s a bottleneck for readily available power in the United States. Bitcoin miners have been stacking power purchasing agreements and power allotments faster than most, so they are uniquely positioned to cash in on the AI wave.

“We have seen power as the bottleneck…So we've made a big bet on the desire for these large interconnects in potentially non-traditional areas, and that's really where the industry is right now. It's a combo platter of figuring out ways to get in front of the people you're feeding,” Page continued. 

A testament to the AI opportunities available for miners, Cipher came out of the woodwork with its AI aspirations when it announced that Japanese tech giant SoftBank made a $50 million investment in the company. Now, Cipher is evaluating Phase 2 of its Black Pearl site in Texas for up to 150 MW of AI/HPC load, as well as its forthcoming 300 MW Barber Lake and 100 MW Stingray sites. 

Cipher joins TeraWulf as one of the bitcoin mining companies that has come out swinging in 2025 with its AI/HPC strategy. Both companies have been working quietly in the background, but now they are becoming more vocal about their AI/HPC data center projects.

Let’s dive into some takeaways from our recent Mining Pod conversions with both companies.

The powershell approach

Bootstrapping an AI data center business is easier said than done. First, there’s the obvious cost burden to construct one of these data centers, which are several magnitudes more expensive than bitcoin mining data centers. 

“When we're building Bitcoin mining facilities, we spend about $500,000 per megawatt to build the Bitcoin mining data center. We're spending $7 to $8 million per megawatt to build the data center for AI. So they're fundamentally different buildings … and our customer partner is spending $30 to $40 million per megawatt [on GPUs and infrastructure],” TeraWulf COO and Co-Founder Nazar Khan said on the Mining Pod, adding that the all-in cost for a 100 MW AI/HPC project could eclipse $4-5 billion.

And then there’s the less obvious – but still challenging – question of the business model. A bitcoin miner could decide to simply host the equipment, an approach many of them are taking, including TeraWulf, Cipher, and Core Scientific. Or they could purchase the equipment and run it themselves as we’ve seen with IREN and Hive. 

But that’s only one part of the equation. They also have to decide which clients they want to serve and which types of computing services they want to offer. Remember, “AI” and “HPC” are blanket terms; whereas bitcoin mining only means one thing, AI/HPC could entail inference services, LLM training, general cloud computing, and a litany of other tasks. 

As such, bitcoin miners have to strike a balance between what is lucrative and what is feasible.

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