Competition for Energy between Bitcoin Mining and AI Data Centers
Bitcoin mining firms and AI data centers are increasingly vying for access to affordable, sustainable energy, which may encourage renewed institutional investment in mining over the coming decade.
A survey released on July 31 indicated that more Bitcoin miners are seeing their operations marginalized. AI data centers, armed with deep financial resources, are beginning to outpace these miners, according to a report by Bitcoin mining infrastructure provider GoMining Institutional.
Nonetheless, Bitcoin miners have a key advantage—flexibility. This is largely due to existing challenges with high-speed internet access for AI facilities, as noted by Jeremy Dreier, Managing Director and Chief Business Development Officer at GoMining Institutional.
This ongoing energy competition could usher in a new phase of institutional investment in Bitcoin mining, Dreier stated during a Cointregraph Chain Reaction discussion.
“In the next five to ten years, we are likely to witness a resurgence in Bitcoin mining, driven by this competition with AI, because institutional capital is getting involved.”
Institutional investment has already begun to flow into U.S. Spot Bitcoin Exchange-Traded Funds (ETFs), with Dreier suggesting that investments in mining could represent the “next step.”
Seeking Cheaper “Virgin” Bitcoin
There seems to be a growing inclination for institutional capital to transition into Bitcoin mining companies. This comes as firms investing in Bitcoin ETFs look to acquire less expensive Bitcoin for their financial statements.
Dreier mentioned that more institutions are exploring the possibility of acquiring cheaper “virgin” Bitcoin, which is seen as more affordable than purchasing at current market prices. The perception is that newly minted Bitcoin carries a lower cost than buying from exchanges.
An increasing number of organizations are reaching out for Bitcoin mining infrastructure services from GoMining, aiming to secure budget-friendly Bitcoin for their financial portfolios, according to Dreier.
Currently, Bitcoin mining costs average around $64,000 in the first quarter of 2025, with projections indicating it may exceed $70,000 by year’s end, as reported by Theminermag.
The competition for energy has caused many Bitcoin mining companies to diversify their endeavors in response to this trend.
For instance, Riot Platforms has decided against expanding its Bitcoin mining operations in Corsicana, Texas, opting instead to explore AI-related opportunities at that location.
Iris Energy is also making a strategic pivot toward AI cloud services. A report by GoMining Institutional mentions that the company is imposing limits on expanding its mining fleet, signifying a significant rearrangement of priorities.
However, Dreier predicts that some public miners who initially jumped onto the AI trend will eventually refocus their investments on Bitcoin mining.
Meanwhile, others are pushing for innovation within Bitcoin mining itself. Block Inc., a company dedicated to cryptocurrency, has launched a new mining system intended to enhance the longevity and cost-effectiveness of mining rigs, which could provide much-needed support for miners struggling to keep their operations running smoothly.
