To: Les H who wrote (48191 ) 10/9/2025 2:33:10 PM From: Les H Respond to Google AI:Volatile profitability: A primary driver for the shift is the inherent volatility and reduced profitability of bitcoin mining. The 2024 halving event cut mining rewards, putting pressure on miners to find more stable revenue streams.Infrastructure advantages: Many crypto miners already possess the necessary infrastructure for AI, including advanced hardware like GPUs, massive energy procurement capabilities, and expertise in thermal management. Repurposing these assets for AI is a logical step.Higher valuations: Companies are drawn to the higher valuations of the AI sector. For example, the CEO of Bitfarms noted in October 2025 that converting its energy assets to support high-performance computing for AI could lead to a significant multiple expansion in its stock valuation. CoreWeave: Starting as an Ethereum mining company, CoreWeave has transformed into a leading AI cloud service provider, attracting major partnerships with Nvidia and OpenAI. This success comes despite concerns about the company's high debt load, though it has booked several years of guaranteed revenue.Core Scientific: This crypto-mining firm partnered with CoreWeave to host a massive amount of GPUs for AI. The deal is expected to generate billions in profits for Core Scientific.Riot Platforms: Initially a bitcoin mining specialist, Riot began developing a data center strategy to leverage its power infrastructure to serve hyperscale and enterprise tenants. Financial skepticism: Despite the potential, skepticism remains about AI's long-term profitability. A September 2025 Bain & Co. report estimated that AI companies' revenue could fall $800 billion short of the $2 trillion needed annually by 2030 to fund computing demand.Rapid, high-stakes investment: Tech firms are pouring billions into advanced chips and data centers to compete in the AI space, even as the ultimate profitability of AI remains unproven for many business models.Comparison to dot-com era: Some recent financing deals have raised eyebrows on Wall Street, with some critics likening them to the questionable vendor financing schemes that fueled the late 1990s bubble.Energy demands and grid strain: The combined, immense energy demands of both bitcoin mining and AI data centers are raising environmental and energy grid concerns. Both sectors have contributed to a major increase in power consumption, straining infrastructure and potentially increasing utility costs for other customers. Stranded assets: Some crypto-mining operations are housed in temporary facilities like shipping containers. If they relocate or fail, communities can be left footing the bill for expensive grid upgrades that are no longer needed.Infrastructure quality: Crypto facilities have historically been optimized for raw computing power over long-term resiliency. Converting these sites into high-reliability data centers requires significant upgrades to power distribution and backup systems to meet industry standards.
