JP Morgan Mining Company Takes Over HighEfficiency Computing Project Sparking Interest from Mining Industry Investors

According to the Morgan Stanley report cited by The Block, the news that mining company Core Scientific will provide GPU hosting services to AI service provider CoreWeave has driven a significant increase in the overall market value of 14 bitcoin miners in the past month.

AI GPU hosting attracts interest from mining company investors

Taking over HPC projects to promote business diversification for mining companies

Morgan Stanley analysts Reginald Smith and Charles Pearce wrote that Core Scientific, as one of the largest publicly traded cryptocurrency mining companies in the United States, saw the news of providing GPU hosting services to CoreWeave earlier this month drive a market value increase for 14 bitcoin mining companies.

Specifically, the overall market value increased by about $4 billion, a growth of 22%, demonstrating the high interest and affirmation of current market investors for bitcoin miners expanding their business to data centers for computing.

Core Scientific CEO Adam Sullivan said at the time, “The new agreement we have signed with CoreWeave allows us to transform our core business and profitability, seize growth opportunities in current high-growth technology areas such as AI computing, while maintaining our strong bitcoin mining business.”

Previously, Core Scientific underwent a restructuring plan at the beginning of this year and relisted on NASDAQ.

Analysts also emphasized that due to mining companies having a complete computing infrastructure, several mining companies are seen by the outside world as potential hosts for AI GPUs and data centers, which undoubtedly increases their attractiveness to investors.

At the same time, this is also driving mining companies to gradually shift towards the development of HPC fields to meet the growing market demand, creating a positive cycle.

As mentioned in Core Scientific’s announcement in June, “With the current demand for HPC projects continuing to outstrip supply, our growing partnership with CoreWeave is creating a path for Core Scientific to diversify our business model and balance our investment portfolio, including bitcoin mining and cloud computing services.”

Furthermore, they added, “As a result, we are able to maximize cash flow while participating in the potential for an upward trend in bitcoin, all while reducing risk.”

Analysts indicated that mining companies can seize new market opportunities by expanding their business to HPC projects, but there are still other challenges:

With the growth of demand for HPC such as AI, companies with low-cost electricity and complete infrastructure will be in a favorable position in future competition.

Finally, analysts also expressed optimism about mining company Iris Energy (IREN), stating that the company’s facilities, based on renewable energy, are in a competitive market position for bitcoin mining and AI cloud computing:

“We believe IREN is best positioned to meet the recent surge in HPC and AI demand, as the company has abundant and not solely focused on bitcoin mining power capacity.”

On the other hand, they criticized another mining company, Riot Platforms (RIOT), for not being proactive enough in the face of the continued growth in HPC demand and opportunities:

Despite having abundant power capacity, RIOT still remains fully committed to bitcoin mining and seems to have little interest in HPC.

Earlier, these two mining companies were also mentioned by Morgan Stanley in their research report in April as being “outperform” and were rated as “buy” for the two mining companies.