Bitcoin mining has been known as an “electricity devil” for the past few years, but with the advent of the AI wave, the electricity required for mining has gradually been received by AI data centers, and Bitcoin miners with large amounts of electricity and computing resources are being transformed into high-performance computing (HPC) and AI computing hosting centers that provide power and computing resources to AI data centers.

Technology company Lancium and Crusoe Energy Systems, one of the largest Bitcoin mining companies in the US, which was named a “promising company” by Musk, announced on Thursday morning that they have reached a multi-billion dollar agreement to build a 200-megawatt data center in the suburbs of Houston, Texas, to meet the advanced cloud computing needs of artificial intelligence companies in applications such as medical research and aircraft design.

According to media reports, this is only the first phase of a plan to build a larger 1.2 gigawatt data center. Lancium president Ali Fenn told the media that when operating at full capacity, it will become one of the largest artificial intelligence data center parks in the world.

“Data centers are rapidly evolving to support modern AI workloads, requiring new high-density rack space, direct-to-chip liquid cooling, and unprecedented overall energy requirements,” said Chase Lochmiller, Co-founder and CEO of Crusoe.

Crusoe: AI transformation is already planned

Crusoe is the most representative company in the Bitcoin mining industry, and its technology helps oil companies turn wasted energy or flare gas into useful resources. The media reported that many Bitcoin miners, with Crusoe's help, set up machines next to these sites to take advantage of this cheaper source of electricity. For example, starting in 2021, ExxonMobil collaborated with Crusoe to mine Bitcoin in North Dakota.

But Lochmiller said the AI infrastructure was actually part of the company's vision when it was founded six years ago.

“We're reimagining AI infrastructure from the ground up — from our energy solutions, to the design, engineering, and construction of our specially designed artificial intelligence data centers, to the manufacturing capabilities of our critical electrical data center infrastructure, and finally our dedicated AI computing stack,” he said.

“Our power orchestration technology ensures that large AI data center parks can become an asset to the grid rather than a burden.”

At the same time, Lancium has patented technology that can transform the needs of energy buyers into dials that can be adjusted step by step within five seconds. This helps balance power grids that rely on inherently fluctuating energy sources such as wind and solar energy. “Lancium's initial vision was to bring large loads to locations with the best, abundant renewable energy to facilitate the energy transition,” Fenn said.

But in 2018, the only load that fits this vision is Bitcoin mining, because one of Bitcoin's greatest features is that it's completely location-independent. Miners only need power and an internet connection, unlike other industries that have to be relatively close to their end users.

Now, Lancium's strategy has turned to artificial intelligence. Fenn said, “Traditional data centers are mainly optimized to be close to urban areas and users. Everything has changed now; AI data centers optimize large-scale energy supply, costs, and green energy. Our vision, campus and technology fit right in with this significantly larger and expanded opportunity.”

It has become a trend for mines to switch to AI

This isn't Crusoe's first foray into AI data center power services. Tesla CEO Elon Musk previously revealed in response to news of the breakdown of cooperation between its X.AI company and Oracle that a “promising company” is assisting Oracle to establish the Nvidia GB200 chip cluster for OpenAI.

Media reports later confirmed that this “promising company” was Crusoe. The company and Oracle are close to reaching an agreement to establish a data center in Abilene, Texas, and deploy Nvidia chips in this data center. Crusoe Energy is responsible for operating this data center. Then, Oracle will rent the servers deployed in this data center to Microsoft, and finally, Microsoft will provide these computing resources to OpenAI for use in AI development.

Currently, more and more Bitcoin miners are joining this transformation circuit. In addition to Crusoe, Bitcoin mining farm Bit Digital is one of them, and it is alleged that 27% of its revenue comes from artificial intelligence. The company said in June that it had signed an agreement with a customer to provide Nvidia GPUs in an Icelandic data center for three years and is expected to generate $92 million in annual revenue. Part of the payment comes from monetizing their cryptocurrency holdings.

Meanwhile, Miami-based mining farm Hut 8 said it has raised $0.15 billion in debt from private equity firm Coatue to help it build its AI data center portfolio.

The artificial intelligence transformation of the mine Core Scientific was particularly successful, allowing the company to escape bankruptcy in January. Earlier, Core Scientific announced a 12-year agreement with Nvidia's “son” and cloud service provider CoreWeave to provide up to 200 megawatts of power hosting for CoreWeave's GPUs. Core Scientific anticipates that the deal will generate $3.5 billion in revenue for the company during the contract period. Additionally, CoreWeave proposed to buy Core Scientific for $5.75 per share. This is the largest Bitcoin escrow transaction in the world to date.

The total market capitalization of the 14 Bitcoin miners tracked by J.P. Morgan Chase hit a record high of $2.28 billion on June 15, adding $4.4 billion in two weeks.