Cryptocurrency miners are abandoning Bitcoin mining in favor of running artificial intelligence (AI) programs due to the high costs of mining digital assets.
According to CoinShares, in the third quarter of 2024, the average cost of mining one bitcoin by legal organizations increased by 13% compared to the second quarter and amounted to $55,950. Because of this, some mining companies have curtailed projects to increase the hash rate of equipment in order to invest more in AI.
Bitcoin Mining Costs by Firm
One of the companies that has cut BTC production is was TeraWulf. On December 23, the company signed an agreement to lease a data center in the US state of New York with a capacity of up to 70 megawatts. This facility was leased by Core42, an organization providing services in the cloud computing market to developers of software based on artificial intelligence.
TeraWulf CEO Paul Prager explained the decision to lease the facility by the company's management's desire to diversify its sources of income and increase the likelihood of generating impressive revenue in the long term. According to Paul, the demand for artificial intelligence-based programs is growing, so there is good money to be made on AI-related computing processes.
Now Bitcoin costs $94,345, so mining one coin brings a profit of $38,395, taking into account the cost of mining at $55,950. Thus, the profitability of cryptocurrency mining reaches 69%. Accordingly, the refusal from BTC mining in favor of AI can be explained by the fact that calculations for artificial intelligence bring even more profit, or miners expect the Bitcoin rate to fall, which will cause a decrease in profits.
