Bitcoin (BTC) mining stocks experienced a decline following reports that Microsoft has shelved its plans to invest in new artificial intelligence data centers in the US and Europe, citing a potential excess supply, according to analysis from Bloomberg and data sourced from Google Finance.
The shares of cryptocurrency miners such as Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital, and Riot fell between 4% and 12% in response to this news, as indicated by the data.
These stock price declines underscore the growing reliance of cryptocurrency miners on revenues generated from artificial intelligence models, especially following the reduction in mining income due to the Bitcoin network’s “halving” event in April 2024.
According to a recent report, miners are diversifying their operations into AI data-center hosting as a strategy to boost revenue and repurpose their current infrastructure for high-performance computing. For instance, in June 2024, Core Scientific committed 200 megawatts of hardware capacity to assist CoreWeave with its artificial intelligence workloads.
In August 2024, an asset management firm noted that Bitcoin mining companies could collectively see an increase in market capitalizations of around $37 billion if they heavily invest in supporting artificial intelligence.
However, miners have faced challenges this year as declining cryptocurrency prices exacerbate the difficulties for businesses already affected by the April halving. A decrease in demand for AI data centers could add yet another layer of pressure.
On March 26, analysts reported that Microsoft had canceled plans for several new data centers that were expected to produce around 2 gigawatts of power. This decision was apparently linked to an anticipated oversupply of computing power for AI applications and the company’s choice to back out of intended collaborations with OpenAI, the creators of ChatGPT. Over the past half-year, Microsoft has terminated various leases for data centers and postponed its plans to add more capacity.
Looking ahead, it is anticipated that Microsoft’s data center investments will further decelerate in the latter half of 2025 as the company completes its $80 billion in planned expansion and shifts its focus to upgrading existing centers with new hardware and equipment.