Crypto miner Hive Digital (HIVE) and Keel Infrastructure (KEEL) have pivoted their businesses towards AI operations amid an industry wide trend.
Press releases from Wednesday show that HIVE has raised money in order to invest in AI infrastructure while KEEL has sold a part of its Bitcoin mining facility.
The moves come at a time when the larger crypto mining industry has moved away from the operations owing to falling mining profits and rising energy rates.
HIVE raises capital
HIVE Digital Technologies is raising fresh capital as it pushes deeper into artificial intelligence and high-performance computing. The company has secured $115 million through a zero-interest convertible note, with the money mainly going into expanding its global data center network and boosting GPU capacity.
Instead of relying only on Bitcoin mining, HIVE is now building infrastructure that can handle multiple workloads, especially AI.
The strategy adopted by the company has been focused towards Tier III data centers that will be established in Canada, Sweden, and Paraguay to facilitate not only crypto mining but also high-end computations, such as AI processing.
To ensure that the company grows without impacting the equity interests of shareholders, measures have been taken to prevent dilution.
KEEL sells part of Bitcoin mining facility
Keel Infrastructure is taking a more conservative route as compared to HIVE Digital. The company recently sold its 70 MW data center in Paraguay for around $13 million, slightly below earlier expectations.
The sale comes as it continues to struggle with weaker bitcoin mining economics and signals a full exit from its Latin American operations.
Keel, which was previously known as Bitfarms, has been in the middle of a broader restructuring and rebranding effort.
With the sale of assets in Paraguay, it is trying to simplify its operations and focus on areas it sees as more sustainable in the long term.
Overall, both companies reflect a wider shift in the mining industry, where firms are moving away from pure bitcoin mining and increasingly looking at AI and data infrastructure as new growth drivers.
Crypto mining industry sees downturn
Crypto mining companies are increasingly moving into artificial intelligence (AI) infrastructure as they look for more stable and profitable ways to grow their businesses in a changing market.
For years, these firms built their business around mining Bitcoin, earning rewards for validating transactions on the network. But that model has become harder to sustain. Mining rewards have been cut in half after scheduled halving events, energy costs have climbed in many regions, and competition has increased as more large-scale operators enter the space.
All of this has made earnings less predictable and profit margins tighter than before.
At the same time, demand for AI computing power has exploded worldwide. Companies developing AI models need huge amounts of processing power, especially GPUs, which are often run through large data centers operating around the clock.
The increasing demand for AI services creates a unique chance for cryptocurrency miners, who usually possess all the necessary infrastructure for such tasks.
Rather than simply leaving their equipment idling, as a result of declining mining profits, they are now utilizing their resources to provide AI hosting and supercomputing services. As part of the process, the existing data centers will make use of their reliable access to energy, cooling, and power purchase agreements, which are crucial for AI computation.
There are several factors behind this trend, but perhaps one of the most important aspects is stability. While crypto mining revenues tend to fluctuate based on the market value of the cryptocurrencies involved and the complexity of the mining process, AI infrastructure agreements are more stable and can provide a steady income stream for the businesses involved.
To put it simply, crypto miners will not leave their technological foundation; rather, they will recycle it. Through adopting the artificial intelligence service, they intend to create balance between the unstable cryptocurrency market and the growing need for computing power within artificial intelligence.