The first half of the year proved to be a turning point for the public bitcoin mining sector. The combined realized hashrate declined by 56 EH/s, equivalent to a loss of 15% of capacity. However, this is not a classic capitulation — a significant portion of the equipment is not switched off but repurposed for high-performance computing (HPC) and artificial intelligence.
My data analysis shows that the bet on diversification is beginning to bear fruit. In the second quarter, disclosed revenue from HPC and AI segments jumped 52% quarter over quarter. Some players have already reallocated about 10% of their capacity to AI infrastructure, and for a number of companies, income from colocation and cloud services has for the first time exceeded proceeds from winding-down mining operations.
The price of transformation
However, this transition is not a cheap endeavor. Total infrastructure modernization costs have exceeded $30 billion. Particularly telling is the gap between capital expenditures and operating revenue: among six major infrastructure providers reporting regular HPC income, CAPEX was nearly 15 times their combined revenue for the period. This is a classic "arms race" story, where investors pay for the future rather than current metrics.
The economics of energy usage have also undergone significant changes. Among the six HPC providers, revenue ranged from $86 to $300 per MWh, with a median of about $180. By comparison, AI cloud services show an average valuation of $940.74 per MWh. This is a colossal premium over traditional mining.
For context: the flagship Bitmain Antminer S23 generates roughly $179.13 per MWh, while the S21 Pro generates $113.45. That is, HPC colocation at the median level is already comparable to the profitability of the most efficient ASIC equipment. Interestingly, Zcash mining temporarily outpaces HPC: the Z15 Pro device brings in about $585.61 per MWh, but this profitability is extremely volatile compared to long-term infrastructure contracts, which often allow electricity costs to be passed on to the client.
The situation with MARA Holdings is also telling — the largest American mining company ended the second quarter with a net loss of $611.3 million, versus a profit of $808.2 million a year earlier. This is a clear signal that even industry leaders are forced to pay a high price for the transition to a new business model.
My conclusion: we are witnessing a fundamental transformation of the industry, where miners are becoming hybrid data centers. In the short term, this pressures financial metrics, but those who successfully complete this transition will gain more stable and diversified revenue streams, less dependent on the whims of the cryptocurrency market.