AI Is Winning the Compute Race, Pushing Bitcoin Miners to Adapt

Bitcoin miners are increasingly looking to artificial intelligence and high-performance computing as an alternative source of revenue, with CoinShares warning that traditional mining economics remain under pressure.

The shift is being driven by a sharp decline in Bitcoin mining returns. CoinShares’ Q1 2026 mining report found that hash price fell to around $29-$30 per PH/s per day at the beginning of the quarter, down from roughly $36-$38 in Q4 2025.

At the same time, AI infrastructure is becoming a much larger part of miners’ businesses. CoinShares estimates that AI-related operations could account for as much as 70% of revenue generated by listed miners by the end of 2026, compared with about 30% today.

Public miners were already facing elevated production expenses. Their weighted-average cash cost for producing one Bitcoin reached approximately $79,995 in Q4 2025.

The competition is no longer simply about mining machines. Electricity, data-center capacity, rack space and financing have become increasingly valuable resources, and AI can provide more predictable returns than Bitcoin mining when hash prices are near cyclical lows.

Companies that already control large amounts of power and data-center capacity are therefore well positioned to convert part of their infrastructure to HPC operations.

Mining remains important in the U.S.

The growing AI business has not resulted in a broad withdrawal from Bitcoin mining in the United States.

Instead, the U.S. increased its share of the global Bitcoin hash rate by approximately two percentage points quarter over quarter. Many publicly traded miners are pursuing a mixed strategy, maintaining mining operations while allocating additional infrastructure to AI and HPC.

More than $70 billion worth of cumulative AI and HPC contracts have been announced by listed mining companies, highlighting the scale of the industry’s transformation.

Infrastructure economics help explain the attraction. Bitcoin mining infrastructure typically costs about $700,000-$1 million per megawatt, while AI infrastructure can require between $8 million and $15 million per megawatt.

Several major miners have already committed substantial capacity to the sector.

Core Scientific has approximately 350 MW energized for HPC, including about 200 MW that is currently billed. Its expanded agreement with CoreWeave is worth $10.2 billion over 12 years.

TeraWulf has 39 MW of critical IT capacity online at Lake Mariner and has signed contracts representing $12.8 billion in HPC revenue.

IREN now operates more than 10,900 Nvidia GPUs, while Hut 8 has agreed to a $7 billion, 15-year lease with Fluidstack covering 245 MW at River Bend.

Different miners are taking different paths

The contribution of AI and HPC to miner revenue varies considerably.

AI/HPC accounted for 39% of Core Scientific’s Q4 revenue and 27% of TeraWulf’s HPC-related business. IREN’s AI Cloud segment contributed 9%, while HIVE’s HPC operations represented 5%.

CoinShares noted that companies are approaching the transition differently.

IREN and Bitfarms are increasingly positioning themselves as HPC infrastructure providers, with Bitcoin mining serving as a bridge during the transition. CleanSpark is placing greater emphasis on mining in the near term while gradually building an AI business.

Marathon, meanwhile, has focused on smaller, containerized facilities of around 10 MW that are better suited to locations where power availability can fluctuate.

That flexibility is one of Bitcoin mining’s advantages. Mining equipment can be switched off when electricity prices rise or supply becomes constrained. AI systems, by contrast, generally require much more consistent power and near-continuous uptime.

Hash-price weakness keeps miners under pressure

CoinShares described the final quarter of 2025 as the mining industry’s toughest period since the April 2024 halving.

A decline in Bitcoin’s price occurred alongside a near-record network hash rate, while three consecutive negative difficulty adjustments further compressed mining economics. According to CoinShares, it was the first such sequence since July 2022.

Hash price briefly dropped to around $28 per PH/s per day in late February before recovering to approximately $30-$35.

The research firm expects more high-cost miners could capitulate during the first half of 2026 unless Bitcoin stages a stronger recovery.

Older and mid-generation mining equipment is particularly vulnerable. Such machines generally need electricity costing less than 5 cents per kilowatt-hour to remain profitable. Newer fleets operating below 15 J/TH are in a stronger position and can generally maintain healthier margins at standard industrial power rates.

AI also complicates mining cost calculations

The transition toward AI is creating another problem: it is becoming harder to separate the economics of Bitcoin mining from those of data-center operations.

Hybrid companies can allocate debt, depreciation and overhead associated with AI infrastructure across their businesses, potentially raising the apparent cost of producing each Bitcoin as mining output declines.

Core Scientific encountered a related accounting issue after shareholders rejected its proposed merger with CoreWeave on Oct. 30, 2025. The company subsequently restated financial statements after assets intended for demolition during the HPC conversion had been improperly capitalized.

BTC remains the key variable

For mining economics to recover significantly, Bitcoin may need to make a substantial move higher.

CoinShares estimates that hash prices could remain above $40 per PH/s per day on a sustained basis only if Bitcoin approaches roughly $100,000 by the end of 2026 and its price appreciation outpaces further hash-rate growth.

A Bitcoin price below $80,000 for the remainder of the year could put additional pressure on hash prices if network difficulty keeps rising. However, widespread shutdowns by unprofitable miners could reduce the hash rate and help stabilize mining returns.

The longer-term durability of the AI pivot remains uncertain. If Bitcoin prices recover strongly, miners could reconsider how they allocate capital between mining and computing infrastructure.

For now, CoinShares views the move toward AI primarily as a response to relative returns rather than evidence that Bitcoin mining is disappearing.

Operators with cheap electricity, flexible power agreements and access to intermittent energy could continue to find mining attractive, particularly at sites that lack the reliable power supply and uptime required by AI infrastructure.