Bitcoin (BTC) mining shares have declined following reports that Microsoft, a technology behemoth, has allegedly canceled plans to invest in new artificial intelligence data facilities in both the US and Europe, citing a probable oversaturation, as reported by Bloomberg and data from Google Finance.
Stocks of cryptocurrency miners including Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital, and Riot decreased by a range of 4% to 12% in correlation with this announcement, according to the data.
The decrease in stock prices underscores the cryptocurrency miners’ growing reliance on services from artificial intelligence models following the Bitcoin network’s April 2024 “halving,” which impacted mining earnings.
CORZ intraday performance seen on Nasdaq. Source: Google Finance
According to Coin Metrics in a March report, miners are “expanding into AI data-center hosting as a means to enhance revenue and re-utilize current infrastructure for high-performance computing.”
For instance, in June 2024, Core Scientific committed 200 megawatts of hardware capability to back CoreWeave’s artificial intelligence workloads.
In August 2024, asset management firm VanEck stated that Bitcoin mining stocks could potentially gain approximately $37 billion in market capitalizations if they significantly invest in AI support.
Nonetheless, miners have faced challenges this year as dropping cryptocurrency values intensify pressures on enterprises already affected by April’s halving, per JPMorgan’s March analysis. Decreasing demand for AI data centers could create additional stress.
Bitcoin miners might experience valuation increases from shifting towards AI. Source: VanEck
Related: Invest more in the Bitcoin miners profiting from AI
Reducing processing power
As of March 26, analysts from TD Cowen indicated that Microsoft has decided against establishing several new data centers that were planned to generate about 2 gigawatts of energy, as per Bloomberg.
The analysts apparently attributed Microsoft’s withdrawal to a recognized oversupply of computational capacity for AI models, along with the technology titan’s decision to halt certain planned collaborations with OpenAI, the creator of ChatGPT.
Over the last six months, Microsoft has terminated various data center leases and postponed plans to add more capacity, as reported by Bloomberg.
The company’s data center expenditures are predicted to further decelerate in the latter half of 2025 as Microsoft completes $80 billion in anticipated buildouts and shifts focus to outfitting existing centers with new hardware and equipment, according to Bloomberg.
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