Tech
Struggling Crypto Miners Seek Rescue Solutions from AI Firms
Cryptocurrency miners are said to be looking to increase their revenue by striking deals with artificial intelligence developers.
As the Financial Times (FT) states reported As of Wednesday (July 17), these miners operate large, powerful processing sites and have struggled to turn a profit due to high energy costs and low mining rewards.
Now, the report says, miners are looking to capitalize on growing demand for chips known as graphics processing units (GPUs), which are used both in their industry and in artificial intelligence (AI) processing.
Scientific coreOne of the world’s largest bitcoin miners is ‘aggressively pursuing’ AI deals, CEO says Adam Sullivan he told the FT.
“It’s an incredibly important part of the business,” he added.
The company, which has data centers in Georgia, North Carolina and Texas, recently reached a deal last month with AI cloud provider CoreWeave that the companies estimate will generate $4.7 billion in revenue over 12 years.
CoreWeave itself is a former cryptocurrency miner who moved into artificial intelligence and saw its valuation soar to $19 billion in May when it raised $7.5 billion in debt financing.
The FT report points out that AI firms require a lot of power and computing infrastructure, both of which are available to cryptocurrency miners, a better proposition than AI firms building their own high-performance computing (HPC) data centers.
(Big tech companies like Google and Microsoft are still spending billions on AI data centers. And as PYMNTS argued in April, they will likely do their part, too own AI chips)
“It [normally] “It takes 3-5 years to build an HPC-grade data center from scratch,” JP Morgan analysts wrote in a recent note, according to the FT. They added that this timeline has been further extended by the growing demand for AI.
An analysis conducted earlier this year by the Energy Information Agency (EIA) estimated that large-scale cryptocurrency operations in the United States consume more than 2% of America’s electricity, roughly equivalent to adding another state to the national electricity grid.
Meanwhile, in January, the International Energy Agency (IEA) released projections for global energy consumption over the next two years, including estimates for electricity use by data centers, cryptocurrencies, and artificial intelligence.
The IEA said that, combined, this use was equivalent to nearly 2% of global energy demand in 2022 and that this demand could double by 2026. This would be nearly the same amount of electricity used by Japan.
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