Bitcoin miners speak out after the halves.
In a BTC-less world, many have stated that they want to dive deeper into high-performance computing.
HPC proved an oft-heard acronym out of the mouths of industry executives in recent weeks as the segment’s companies reported first-quarter results — and more importantly, detailed future growth strategies.
Nishant Sharma, founder of BlocksBridge Consulting, said that miners are always looking for ways to reduce their costs and improve the efficiency by upgrading mining hardware.
Companies have focused their efforts on developing new revenue streams to replace mining, as the block rewards per block dropped from 6,25 BTC down to 3.125 BTC.
“A trend that started before [the] halving and appears to be gaining traction among bitcoin miners is repurposing bitcoin mining infrastructure for HPC and other [AI] applications,” Sharma explains Blockworks.
It’s not a brand new thing. Hive Digital Technologies was the first company to take this seriously by changing its business name in July of 2023. It noted at the time that its 38,000 Nvidia GPUs — or graphics processing units — have the capability to do AI workload.
Hive’s fourth-quarter revenue of $900,000.00 from HPC is still relatively new. It is not known what the company’s revenue for 2024 will be.
Some have.
HPC revenue is now being realized
Bit Digital, Iris Energy, and Hut 8 have all started to report the revenue generated from their HPC business lines.
“I believe more companies will start doing so after their AI/HPC ventures become operational,” Sharma,
Hut 8 has reported revenue in excess of $3 million. “high-performance computing, colocation and cloud” umbrella — roughly 6% of the revenue it generated during the quarter.
Asher Genoot, CEO of the HPC division. “sub-scale” In March, the company noted that its infrastructure will need to be upgraded in order to accommodate AI machines.
The company launched its new AI vertical earlier in the quarter under a “GPU-as-a-service model,” He noted this on Hut 8’s earnings call Wednesday. The company purchased 1,000 Nvidia graphics cards and signed a contract with an AI cloud platform that was not named.
Genoot expects the revenue from this new vertical will start to flow in the second half of the year, at a rate estimated annually around $20 million.
“Today, we believe bitcoin mining generates the highest return on investment into large scale stranded load interconnection assets,” Hut 8’s CEO joined the conference call. “However, we also see a massive opportunity in the broader energy infrastructure sector as demand grows across new use cases like AI.”
A bit further along on the HPC revenue journey was Bit Digital, which saw about $8 million in revenue — 27% of its total first-quarter revenue — come from HPC.
This business began generating revenues in January. Bit Digital disclosed the new unit — focused on supporting generative AI workstreams — in October, noting it had bought 132 integrated HPC platforms and 1,056 GPUs for $35 million.
Iris Energy also continues to develop its AI cloud service business.
Poolside AI, a customer of the Australian miner, ordered 248 Nvidia graphics cards. The revenue generated by this segment was $600,000.
In February, it purchased 568 more Nvidia GPUs H100 for $22 Million. These were to be delivered in the current quarter.
Additional HPC aspirations
Though others — such as Core Scientific, Stronghold Digital Mining and Terawulf — don’t yet have a dedicated HPC revenue line listed, that doesn’t mean they aren’t committed. It’s possible that they are at least thinking about what HPC could bring to their businesses.
Core Scientific “significant advantage” Adam Sullivan, the CEO at a recent earnings call, stated that what sets Sullivan apart from his competitors is their exclusive control of high-power datacenter infrastructure.
This HPC segment is “the next major growth opportunity for our business,” He also added.
Core Scientific announced in March it will lease 16 Megawatts of its Austin datacenter to CoreWeave. CoreWeave could earn more than $100 million from this deal. Executives noted that more than 500 MW out of the 1.2 gigawatts contracted by CoreWeave can be used for other compute workloads.
Stronghold Digital Mining announced that it would be willing to sell its assets or even the entire company, during its earnings call held on May 2.
CEO Greg Beard wanted listeners to know that its 130 MW of energized data center capacity could expand to more than 400 MW — with a possible focus on supporting AI and machine learning.
Terawulf, a mining company based in Maryland, is currently finalizing its design for the HPC area at the Lake Mariner Facility located in New York. It committed to a 2-MW powerblock capable of running thousands of GPUs.
Joe Flynn, an analyst at Compass Point Research & Trading, estimated in a May 14 research note that Terawulf could generate up to $1.5 million of yearly revenue, per megawatt, from HPC co-location services.
Then he added: “We continue to prefer miners that own and operate their own infrastructure, and believe there is optionality for [Terawulf] to pursue AI/HPC opportunities that would lead to a re-rating of the stock from long-term and more predictable free cash flows.”
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