The public bitcoin mining market is undergoing a structural shift. In the first half of the year, the realized hashrate of the largest players declined by 56 EH/s, equivalent to 15% of their combined capacity. However, this is not a classic capitulation—a significant portion of the computing resources was not switched off but repurposed for high-performance computing (HPC) and artificial intelligence.
AI revenue is growing, but the cost of transition is high
In the second quarter, the combined disclosed revenue from HPC and AI segments jumped by 52% compared to the first quarter. Some companies have already redirected about 10% of their capacity to AI infrastructure, and for certain players, income from colocation and cloud services has for the first time exceeded revenue from the winding-down core business.
Nevertheless, the transformation requires enormous investments. Total costs for infrastructure reconfiguration have exceeded $30 billion. The gap between investment and returns is particularly telling: among six providers reporting stable HPC revenue, capital expenditures were nearly 15 times higher than their income for the reporting period.
The economics of the new segment still look uneven. Among the six infrastructure companies, revenue per megawatt-hour ranged from $86 to $300, with a median value of about $180. For comparison, the average estimate for AI cloud services reached $940.74 per MWh.
Comparison with mining: volatility versus stability
For clarity, these figures can be compared with the profitability of classic equipment. The Bitmain Antminer S23 miner generates approximately $179.13 per MWh, while the older S21 Pro model brings in $113.45. Thus, HPC colocation by median is already comparable to top-tier ASIC devices.
The key difference lies in the business models. HPC colocation contracts are signed years in advance and often allow energy costs to be passed on to the client, providing predictable cash flow. Mining, in turn, remains hostage to the bitcoin price, network difficulty, and fees.
Interestingly, at the moment, Zcash mining temporarily outpaces HPC in profitability per unit of energy: the Z15 Pro device generates about $585.61 per MWh. However, such profitability is highly volatile and does not offer the stability that investors seek in infrastructure assets.
Against this backdrop, the sector's financial results look mixed. The largest American mining company, MARA Holdings, ended the second quarter with a net loss of $611.3 million, whereas a year earlier it recorded a profit of $808.2 million.
My analysis: the current diversification is not a flight from bitcoin but risk hedging. Miners are transforming into versatile data center operators, which increases their resilience to the cyclicality of the crypto market but requires discipline in managing debt loads during such aggressive capital expenditures.