JP Morgan Mining Tycoons Take Over HighEfficiency Computing Project Sparking Interest from Mining Investors
According to a report cited by The Block, mining company Core Scientific’s offer to provide GPU hosting for artificial intelligence service provider CoreWeave has driven a substantial increase in the overall market value of 14 bitcoin mining companies over the past month.
AI GPU hosting piques the interest of mining company investors
Taking over HPC projects to promote business diversification
Positive outlook on IREN, skepticism towards RIOT
Analysts from JPMorgan Chase, Reginald Smith and Charles Pearce, wrote that Core Scientific, one of the largest publicly listed cryptocurrency mining companies in the United States, announced the GPU hosting offer for CoreWeave earlier this month, resulting in a market value increase for 14 bitcoin mining companies.
Specifically, the overall market value has increased by approximately $4 billion, a growth of 22%, indicating a high level of interest and affirmation from current market investors for bitcoin miners expanding their business into data centers for computing.
Core Scientific CEO Adam Sullivan stated at the time: “The new agreement we’ve signed with CoreWeave enables us to transform our core business and profitability, seizing growth opportunities in current dynamic technological areas like AI computing, while maintaining our strong bitcoin mining business.”
Earlier this year, Core Scientific executed a restructuring plan and relisted on the NASDAQ.
Analysts also emphasized that due to mining companies having sophisticated computing infrastructure, several mining companies are seen by outsiders as potential AI GPU hosting and data centers, which undoubtedly increases their attractiveness to investors.
At the same time, this also drives mining companies to gradually shift towards HPC development to meet the growing market demand, creating a positive cycle.
As mentioned in an announcement by Core Scientific in June: “With the current demand for HPC projects continuing to surpass supply, our expanding partnership with CoreWeave is creating a pathway for Core Scientific to diversify our business models and balance our investment portfolios, including bitcoin mining and cloud computing services.”
They added, “As a result, we are able to maximize cash flow while minimizing risk, and at the same time maintain participation in the potential upside of Bitcoin.”
Analysts indicated that mining companies can seize new market opportunities by expanding their business into HPC projects, but there are still other challenges:
With the increasing demand for AI and other HPC, companies with low-cost electricity and complete infrastructure will be in a favorable position in future competition.
Finally, analysts also expressed optimism for mining company Iris Energy (IREN), stating that the company’s facilities, based on renewable energy, are in a competitive market position in both 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 power capacity and not just a focus on bitcoin mining.”
On the other hand, they criticized another mining company, Riot Platforms (RIOT), for not being proactive enough in the face of ongoing growth in HPC demand and opportunities:
Despite having abundant power capacity, RIOT is still fully committed to bitcoin mining and seems to have little interest in HPC.
These two mining companies were previously mentioned in JPMorgan Chase’s report in April as being rated “overweight”.
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