Author: Nancy, PANews
As crypto assets continue to slump, crypto mining companies are facing increasing pressure to survive. To find new growth curves, more and more miners are accelerating their shift into the AI track. This transformation narrative quickly gained favor in the capital markets, with many miners' stock prices surging significantly, even hitting record highs.
However, while the AI business injects new growth potential into miners, the massive capital expenditures, continuous funding requirements, and long return cycles behind it are pushing miners into another war of financial attrition. At a time when the profitability of their core mining business remains under pressure, this high-stakes gamble of transitioning to AI is testing miners' financial strength and execution capabilities.
Stock Prices Outperform Bitcoin Significantly, Miner Valuations Enter a Phase of Differentiation
Mining companies are transforming into the landlords of computing power in the AI era.
As Bitcoin mining profit margins continue to shrink, with some miners even falling into losses, the AI boom has driven a sharp increase in global demand for data centers, power resources, and GPU computing power. More miners are accelerating their transformation into AI infrastructure, seeking new growth curves.
For miners, this transition offers natural advantages. Over the long term, to meet large-scale mining demands, miners have amassed key assets such as abundant power resources, land reserves, substation access capabilities, and mature cooling systems. Compared to data center operators starting from scratch, miners can quickly enter the AI infrastructure market by upgrading existing facilities, meeting AI computing power demands at lower costs and in shorter timeframes.
Since last year, the pace of miners' transformation to AI has noticeably accelerated. Some miners decisively downplay or even exit traditional mining to fully pivot to AI computing and data center operations; others retain part of their mining business but gradually shift the focus of resource allocation and capital expenditure to the AI field. Today, several miners have become key players in AI infrastructure construction.
Looking at the timing of transformation, CoreWeave, Applied Digital, and Bitdeer began deploying AI computing and data center businesses as early as 2022-2023, among the industry's early movers; while miners like Iris Energy, Terawulf, Hut 8, Riot Platforms, and Bitfarms started fully ramping up AI infrastructure construction in 2025, coinciding with the AI industry's rapid expansion cycle.
In terms of stock performance, the market has shown high recognition for the AI transformation narrative. The 11 miners have achieved an average year-to-date gain of 75.97%, significantly outperforming Bitcoin over the same period, with most hitting new highs post-transition. Among them, Bitfarms (129.62%), Hut 8 (131.87%), Terawulf (118.68%), and Riot Platforms (93.71%) have stood out, benefiting from this round of AI infrastructure revaluation.
In terms of market capitalization, miners have clearly differentiated. As a successful transformation representative, CoreWeave's market cap has reached $62.855 billion, far exceeding other miners and becoming the industry's new valuation benchmark; Iris Energy, Terawulf, Hut 8, Applied Digital, and Riot Platforms form a tier with market caps between $10 billion and $20 billion; companies like MARA Holdings, Core Scientific, Bitdeer, CleanSpark, and Bitfarms remain in the sub-$5 billion range. This differentiation stems not only from first-mover advantage but also reflects the market's differentiated pricing of each miner's AI strategy execution capability, customer resources, and data center deployment progress.
However, from a fundamental perspective, most miners remain in the heavy-investment phase of AI transformation. Although many miners' latest quarterly reports show revenue growth, overall profitability remains under pressure. On one hand, fluctuations in the value of crypto asset portfolios drag down profit performance; on the other hand, AI data center construction requires massive capital expenditures, with increasing investments in power expansion, infrastructure, and GPU procurement driving continuous operational cost increases, keeping most miners in a loss-making state.
Notably, despite generally pressured earnings, these miners' stock prices have surged significantly, indicating that the current market focus is not on short-term profitability but on the growth potential of miners as new-generation computing power infrastructure operators.
Miners' Survival Battle Escalates, AI Transformation Must Overcome Multiple Hurdles
The downturn in the Bitcoin market is making the survival environment for miners increasingly severe.
According to Capriole Investments data, as of June 18th, the average Bitcoin production cost was approximately $63,707, with electricity costs around $50,965, resulting in a miner profit margin of just 17.45%. Over the past 30 days, miner profit margins have contracted by 47.8%. Meanwhile, Luxor Hashrate Index data shows that as of June 18th, the daily revenue per 1 TH/s of hashrate has dropped to $0.032, a significant decline from $0.053 a year ago.
With mining revenues continuously shrinking, many miners have had to sell Bitcoin to maintain cash flow, further intensifying survival pressure for small and medium-sized miners, and accelerating the concentration of mining resources towards leading players. Currently, the three largest mining pools—Foundry USA, AntPool, and F2Pool—collectively hold 59% of the network's total hashrate share. In comparison, in 2022, the top three Bitcoin mining pools held only 44% of the hashrate market share.
Although the traditional mining business is struggling, the explosive growth in AI data center demand is also prompting a market revaluation of miners. VanEck's latest research report points out that miners' most valuable assets are not mining rigs, but power resources, substation access capabilities, land reserves, and data center infrastructure—precisely the scarce core resources the AI industry needs most today. Because AI customers are willing to pay electricity rates and rents far higher than those in traditional mining, AI infrastructure is expected to become miners' primary growth engine for the next decade.
A Bernstein report reveals that hyperscale cloud providers, AI cloud service providers, and chip companies have already announced over $90 billion in AI infrastructure collaborations, involving about 3.7 GW of power capacity. Currently, chasing power resources has become the core of AI infrastructure competition, with Bitcoin miners collectively controlling over 27 GW of planned power capacity. In some parts of the US, the timeline for new 1 GW power connections can be as long as 50 months, making existing mining sites key locations for AI data center expansion.
However, the AI transformation is far from an easy path. VanEck notes that the market is still in the early stages of AI transformation, with company valuations primarily based on Gross Energized Power. Miners with signed AI leases generally receive higher valuation premiums, while projects still in the planning stage struggle to gain market recognition. Future industry valuation logic will gradually shift from "power capacity" to "project delivery capability," ultimately returning to core metrics like cash flow, return on capital, and tenant quality. Currently, the industry has only delivered about 25% of its signed capacity. The ability to complete AI data center construction on time and on budget will become a key factor determining company valuations.
VanEck also emphasizes that AI tenant quality will directly impact miner valuation levels. Clients like Microsoft, Amazon, and Google (hyperscale cloud providers) bring more stable cash flows and lower financing costs, while smaller GPU cloud service providers correspond to higher operational risks and capital costs.
The enormous funding required for transformation is also testing miners' financial strength. VanEck estimates that miners' transition to AI infrastructure still faces massive capital expenditure needs, with a short-term funding gap of about $50 billion and long-term capital requirements potentially reaching $221 billion.
Under immense financial pressure, many miners have already started raising funds through various means. For example, miners like Iris Energy, TeraWulf, Bitfarms, and CleanSpark have raised funds by issuing convertible bonds, attracting investors with lower coupon rates and future equity conversion potential; while companies like Core Scientific, Terawulf, MARA, Bitdeer, and Riot Platforms have chosen to sell or even liquidate part of their Bitcoin reserves to continuously fund the AI transition.
Additionally, many miners are beginning to lock in future revenue by signing long-term AI or High-Performance Computing (HPC) contracts, using them to secure project financing and reduce overall operational risk. For instance, CoreWeave signed a $6 billion AI cloud service cooperation agreement with Jane Street; IREN secured a $9.7 billion AI cloud computing contract with Microsoft; Hut 8 signed data center leasing agreements totaling $9.8 billion; and Bitdeer partnered with Norway's DCI to build the country's largest AI data center project, among others.
For miners, AI undoubtedly offers a far more imaginative development path than traditional mining at this stage. However, this transformation is not simply a switch from mining to selling computing power; it is, in essence, a long-term competition centered on capital, resources, and execution capability.
