Bitcoin Miners Explore AI Opportunities Amid Revenue Challenges

According to Cointelegraph, investors are closely monitoring the revenue potential from artificial intelligence (AI) computing and chip-making in the upcoming fourth-quarter earnings reports of leading Bitcoin mining companies. As the April 2024 Bitcoin halving event has reduced mining revenues, miners are increasingly focusing on non-core business lines to offset potential losses. Bitcoin mining companies such as Riot Platforms (RIOT) and Bitdeer (BTDR) are set to release their earnings on February 24 and 25, respectively, while Marathon Digital (MARA) and Core Scientific (CORZ) will report on February 26. In November, these companies reported lower-than-expected earnings due to decreased Bitcoin mining margins following the halving event, which reduced mining rewards from 6.25 BTC to 3.125 BTC per block. Analysts remain optimistic about the potential of adjacent business lines, such as leasing high-performance hardware to AI models and selling specialized ASIC microchips, to compensate for the decline in mining revenues. Bitdeer has launched a new business line focused on selling its specialized hardware, with analysts from H.C. Wainwright & Co expressing confidence in the strong demand for Bitdeer's ASIC chips. They have rated Bitdeer's stock as a "buy" and increased its price target to $18, despite its current trading price of around $13 per share. Riot Platforms has also adjusted its strategy, lowering its 2025 hashrate outlook to explore the feasibility of utilizing its remaining capacity for AI and high-performance computing services. Riot's stock is similarly rated as a "buy," with a price target of $17, compared to its current share price of $10. Larger mining companies are also seeking to reduce costs by scaling capacity, including acquiring power supplies and data centers. Bitdeer plans to invest $100 million in building an in-house power plant and data center in Alberta, Canada. Marathon Digital has announced plans to expand and diversify its portfolio of owned and operated sites to achieve significant cost savings. The demand for computational power for AI models presents lucrative opportunities for Bitcoin miners. As AI companies require substantial energy, Bitcoin miners are well-positioned to meet this demand. In December, activist investor Starboard Value reportedly acquired a stake in Riot to encourage diversification into AI-related services. Subsequently, Riot announced changes to its board of directors and initiated a formal review of AI opportunities for the company.