Why Bitcoin Miners Aren’t All Jumping on the HPC/AI Data Center Bandwagon
While some of the largest Bitcoin (BTC) miners are leveraging their infrastructure to operate high-performance computing (HPC) data centers, not all are following this path. These centers, essential for processing large datasets and training artificial intelligence (AI) models, consume substantial energy.
This is a press release submitted to BitPinas.
Key Partnerships and Moves in the Industry
Core Scientific Inc., a prominent Bitcoin mining company in the U.S., recently announced a 12-year partnership with CoreWeave to provide around 270 megawatts (MW) of power for hosting CoreWeave’s NVIDIA GPUs, aimed at HPC operations.
Similarly, Hut 8 Mining Corps has secured an agreement to provide colocation services at its Kelowna data center in Canada through 2028. Additionally, Iris Energy, a Bitcoin miner based in Sydney, plans to build 510 MW of data centers this year.
The Rationale Behind Hosting HPC Data Centers
Jamie McAvity, CEO of Cormint Data Systems, explained that North American Bitcoin miners often possess the infrastructure necessary for HPC data centers.
He pointed out that these miners have high-voltage connections and can fully power electrical transmission systems. Despite the differences between Bitcoin mining and HPC centers, there are some shared aspects.
There has been a significant shortage of infrastructure for HPC data centers, especially in the U.S., where demand for AI model training centers is rising.
Established Bitcoin miners from 2018 and 2019 may already have the required infrastructure. An example is Core Scientific’s deal with CoreWeave. Initially an Ethereum miner, CoreWeave transitioned to AI after Ethereum switched from proof-of-work to proof-of-stake.
Introducing 99Bitcoins: A New Crypto Project
One emerging player in the crypto space, 99Bitcoins, exemplifies how new projects can intersect with established practices. While 99Bitcoins primarily focuses on providing educational resources and tools for cryptocurrency enthusiasts, it also highlights the broader potential for innovative projects within the crypto ecosystem.
As more Bitcoin miners consider diversifying their operations, projects like 99Bitcoins may benefit from the expanded infrastructure and technological advancements driven by the integration of HPC data centers. This synergy could foster a more robust and interconnected crypto industry, where education, mining, and high-performance computing coexist and thrive.
Profitability and Costs of HPC Data Centers
CoreWeave, now valued at $19 billion, helps Core Scientific make substantial profits. McAvity highlighted that long-term contracts with high-profile companies make hosting HPC data centers highly lucrative.
The price per kilowatt-hour for HPC leases can range from 50 cents to a dollar, significantly higher than the 5-10 cents per kilowatt-hour from Bitcoin mining, resulting in tenfold revenue increases.
However, not all Bitcoin miners can adopt this model due to its challenges and costs. Russell Cann, Chief Development Officer at Core Scientific, emphasized the volatility of Bitcoin mining compared to the stable high margins of HPC.
He noted the significant capital required for HPC data centers: building a quality Bitcoin mine costs about $1 million per MW, whereas an HPC data center filled with GPUs can cost between $35 million to $60 million per MW.
Specific Requirements for HPC Data Centers
Cann also mentioned the natural transition for Core Scientific to partner with CoreWeave, given their long-standing relationship. He shared that Core Scientific began entering the AI sector in 2019, repurposing traditional data centers for HPC/AI hosting. However, not all Bitcoin miners have the infrastructure for such transitions.
Bitcoin miners with large energy needs can potentially host HPC data centers, but the switch from flexible to fixed loads is a significant leap. Additionally, AI data centers require extensive network infrastructure, including access to high-throughput, low-latency fiber optic backbones, which many Bitcoin miners lack.
The Future of HPC Data Centers for Bitcoin Miners
While some Bitcoin mining sites meet the necessary requirements, Cann believes many will not transition to HPC data centers due to the substantial infrastructure and resources needed. Core Scientific, with 1200 MW of contracted power divided between Bitcoin mining and HPC, is evaluating new locations to support both operations.
McAvity suggested that Bitcoin miners could benefit from following Core Scientific’s lead if they can afford the costs. He noted that established relationships, like that between Core Scientific and CoreWeave, play a crucial role. Despite the increasing demand for AI data centers, entering the sector remains challenging but potentially highly profitable for those who can succeed.
This press release is submitted to and published on BitPinas: Why Bitcoin Miners Aren’t All Jumping on the HPC/AI Data Center Bandwagon
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