“Historically Low Hashprice”: Bitcoin Miners Quit and Pivot to AI

Set Trending Topics as a preferred source on Google.

Bitcoin miners have swapped their mining rigs for AI contracts, and right now AI infrastructure is falling faster on the stock market than Bitcoin itself.

Core Scientific, founded in 2017 and for years one of the largest listed Bitcoin miners in the US, will shut down mining completely by the end of the year. “We will complete our exit from Bitcoin mining by year end,” CEO Adam Sullivan said on the third-quarter earnings call. CFO Jim Nygaard added that the company would “complete the wind-down during the fourth quarter” and start 2027 as a “pure-play, high-density colocation provider” with a “very clean” profit and loss statement free of mining. As recently as December 2025, the Wall Street Journal had reported the exit was planned for 2028. Now it is happening two years sooner.

From Mining to Leasing

The quarter’s numbers explain why. Of 232.9 million dollars in revenue, 215.4 million came from leasing data center capacity, while Bitcoin mining brought in 17.5 million dollars, 7.5 percent of the business. Self-mining revenue shrank from 57.4 to 12.3 million dollars within a year and is running at a gross loss, whereas colocation runs at a gross margin of around 60 percent. At the end of September, Core Scientific had almost 50 percent fewer miners online than at the end of 2025. Earlier, the company had written down 266.5 million dollars on mining assets in the first quarter, citing weak Bitcoin prices, a “historically low hashprice” and the falling value of used mining hardware, and in the second quarter it terminated a hardware agreement with Block at a loss of 41.9 million dollars.

The new business depends on two customers. With CoreWeave, the largest of the so-called neoclouds, Core Scientific has had contracts since 2024 covering 590 megawatts across six sites, around 485 megawatts of which are already billed. Added to that is a deal with AMD for 530 megawatts across five campuses, with delivery starting in the first half of 2027 and completion by the end of 2028. Together about 1.1 gigawatts, which the company says should generate around 1.8 billion dollars (roughly 1.6 billion euros) in annual revenue once fully built out, with 1.6 billion dollars in net operating income. The business model is that of a real estate landlord: Core Scientific builds the halls and supplies power and cooling, and the tenants bring the GPUs.

The Whole Industry Is Switching Sides

Core Scientific is not alone. Iren, formerly Iris Energy, reported numbers on the same day that look like a carbon copy: mining revenue fell to 28 million dollars in the quarter, 58 percent less than the previous quarter and 88 percent less than a year earlier, the company mined 402 Bitcoin instead of 2,039, and hashrate dropped from 45.3 to 8.8 exahash. AI cloud revenue, by contrast, rose 182 percent to around 200 million dollars, carried by a 9.7 billion dollar contract with Microsoft as well as Nvidia and 13 other customers, lifting total revenue to 228 million dollars. In its quarterly filing, Iren frames the exit as a conversion in progress: “We continue to operate Bitcoin miners at certain of our data centers while we transition this data center capacity toward AI Cloud,” the company wrote. “We aim to substantially complete this transition by December 31, 2026, with immaterial Bitcoin mining operations expected to continue through calendar year 2027.” The miners, in other words, keep running only until the GPUs stand in the same halls. The company holds no Bitcoin anymore; mined coins are sold daily. Net loss came to 263 million dollars. Cipher Mining has abandoned most of its Bitcoin business and sits on 9.3 billion dollars in AI contracts, anchored by a 300 megawatt deal with AWS and a Google-backstopped agreement with Fluidstack. TeraWulf has 12.8 billion dollars in HPC contracts with Fluidstack and Core42 in the pipeline, Hut 8 a 15-year, 7 billion dollar lease with Anthropic and Fluidstack, Applied Digital around 11 billion dollars in leases with CoreWeave. Together, the five largest AI converts have disclosed more than 50 billion dollars in AI contracts according to CryptoQuant, their Bitcoin production has fallen 47 percent year over year, and at least 35 exahash per second of computing power is leaving the network with them.

That hurts the Bitcoin network less than one might think. Hashrate had fallen below 900 exahash in August, the deepest drop since China’s 2021 mining ban, but has since regained 105 exahash, mainly from private, state-backed and non-American miners. Those who stay earn more: output at MARA, CleanSpark, Riot and the like is up 16 percent. Until recently, the converts’ logic was unbeatable: a megawatt that barely clears power costs when mining Bitcoin, depending on the hashprice, brings in a multiple when leased to an AI customer, secured by contracts running ten to 15 years with Microsoft, Google, AWS or Anthropic as end customers. The stocks rewarded it: by April, TeraWulf, Hut 8 and Core Scientific were up 40 to 70 percent while Bitcoin lost 12 percent.

The Timing Could Hardly Be Worse

Since then the wind has turned, and violently. The neocloud stocks the ex-miners have tied themselves to have collapsed over the past month: CoreWeave has lost 52 percent since early October, Nebius 52 percent, Iren 56 percent, Cipher 64 percent, Hut 8 50 percent, Applied Digital 44 percent, Core Scientific itself 32 percent, and on Thursday alone the group fell 10 to 17 percent, caught in the selloff in AI stocks after the Democrats’ election win. The triggers came in quick succession: Microsoft reported capital spending below expectations, Elon Musk predicted on X that the “200+ neoclouds” would see “guppy-level death and consolidation,” with only a few surviving, and said credit markets had stopped lending to companies without income outside AI data centers. Then came the midterms, after which 78 percent of newly elected lawmakers want to regulate or halt data centers, of all places in Texas and Georgia, where many of the converted mining sites are located.

For Core Scientific and its peers, that is a double problem. First, their income depends on the solvency of tenants like CoreWeave, which are themselves heavily indebted and whose customers, the hyperscalers, are currently reviewing their spending plans. Second, the industry has sold its fallback option: whoever has written off its miners and converted its halls for GPUs cannot go back to Bitcoin if the AI tenant defaults, not even at 80,000 dollars a coin. The contracts run for years, but a ten-year contract with a company the credit markets are avoiding is only worth as much as that company’s next funding round.

What Argues for the Pivot

The counterargument comes from Core Scientific itself: the mining business was a loss-maker even before the conversion, with shrinking margins, rising energy needs and a hashprice that never recovered after the 2024 halving. The customers at the other end of the contracts are Microsoft, Google, AWS, AMD and Anthropic, and the product, power and halls at sites with approved grid connections, is exactly what is scarcest in the US right now, as CoinShares noted this week: miners with secured power access and operating data centers remain interesting because the big cloud providers are competing for infrastructure that cannot be built overnight. If the hyperscalers are no longer allowed or willing to build their own data center fleets under the new Congress, the ex-miners become landlords that are needed. And if the AI boom really does burst, they are the first link in the chain to snap. Core Scientific has placed its bet. Whether it was the right one will be decided not by the miners but by the tenants.