JPMorgan Chase Mining Industry Takes Over HighEfficiency Computing Project Sparking Interest from Mining Investors

According to a report cited by The Block, mining company Core Scientific’s provision of GPU hosting services to artificial intelligence service provider CoreWeave has led to a significant increase in the overall market value of 14 Bitcoin mining companies in the past month.

AI GPU hosting attracts mining company investors’ interest
Taking over HPC projects to promote diversification of mining businesses
Positive outlook on IREN, confusion over RIOT

Analysts from J.P. Morgan, Reginald Smith and Charles Pearce, wrote that Core Scientific, one of the largest publicly traded cryptocurrency mining companies in the United States, saw a boost in the market value of 14 Bitcoin mining companies after the news of its provision of GPU hosting services to CoreWeave earlier this month.

Specifically, the overall market value increased by approximately $4 billion, a growth of 22%, indicating the current market investors’ high interest and affirmation of Bitcoin miners expanding their business to data centers for computation purposes.

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Core Scientific’s CEO, Adam Sullivan, stated at the time:
“Our new agreement with CoreWeave allows us to transform our core business and profitability, seize the growth opportunities in the most dynamic technological areas such as AI computing, while maintaining our strong Bitcoin mining business.”

Previously, Core Scientific underwent a restructuring plan earlier this year and relisted on NASDAQ.

(Shedding bankruptcy shadows! Mining company Core Scientific’s restructuring plan approved, relisted on NASDAQ at the end of January)

The analysts also emphasized that due to the mining companies’ well-established computational infrastructure, several mining companies are seen as potential hosts for AI GPUs and data centers, which undoubtedly increases their attractiveness to investors.

At the same time, this drives mining companies to gradually shift towards the HPC (High-Performance Computing) field to meet the growing market demand, creating a positive cycle.

As mentioned in Core Scientific’s announcement in June:
“With the ongoing demand for HPC projects surpassing supply, our expanding collaboration with CoreWeave has paved a path for Core Scientific to diversify our business model and balance our investment portfolio, including Bitcoin mining and cloud computing services.”

They added, “Therefore, we are able to maximize cash flow while reducing risks and still participate in the potential upside of Bitcoin.”

The analysts stated that mining companies can seize emerging market opportunities by expanding their business to HPC projects, but there are still other challenges:
Companies with low-cost electricity and comprehensive infrastructure will have an advantage in future competition as AI and other HPC demands grow.

Finally, the analysts expressed optimism about mining company Iris Energy (IREN), stating that the company’s facilities, based on renewable energy, are in an advantageous market position for Bitcoin mining and AI cloud computing, making it best suited to meet the recent surge in HPC and AI demand:
“We believe IREN is best positioned to meet the surging HPC and AI demand, as the company has abundant power capacity that is not solely focused on Bitcoin mining.”

On the other hand, they criticized another mining company, Riot Blockchain (RIOT), for not showing enough enthusiasm towards the growing HPC demand and opportunities:
“Despite having abundant power capacity, RIOT remains solely dedicated to Bitcoin mining and seems less interested in HPC.”

These two mining companies were mentioned in J.P. Morgan’s research report in April this year, rated as “overweight” and viewed favorably.

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Further reading
Miners catch their breath! Report suggests Bitcoin hash rate and mining difficulty may decrease in summer, competition will slow down
Mining company acquisition frenzy! Riot counters Bitfarms, continues to increase its stake to 14%: No communication between the two parties