Investment firm Bernstein has initiated coverage on a basket of bitcoin miners with "Outperform" ratings, framing them as prime beneficiaries of a $90 billion wave of investment in artificial intelligence data centers. The May 19 report singled out IREN (IREN), Riot Platforms (RIOT), CleanSpark (CLSK), and Core Scientific (CORZ) as companies positioned to capitalize on the immense energy needs of AI.
"Sovereign AI infrastructure that turns Canadian intelligence into Canadian dominance," Frank Holmes, Executive Chairman of Hive Digital Technologies, said in a statement regarding his company's own recent data center announcement, encapsulating the national-level interest in the trend.
The "follow the gigawatts" strategy is gaining traction, with investors valuing miners on their total power capacity. Hive Digital's stock jumped 26% after it unveiled plans for a 320-megawatt AI facility in Toronto. Meanwhile, Keel Infrastructure (formerly Bitfarms) has amassed a 2.2-gigawatt power pipeline. Bernstein's report highlights a potential $90 billion in AI-related deals that these energy-rich companies could compete for.
This pivot to high-performance computing (HPC) represents a fundamental strategic shift for the crypto mining industry, offering a potentially more stable revenue stream than volatile digital asset markets. The potential rewards are substantial; Cipher Mining recently signed a 15-year, $5.5 billion contract to provide 300 megawatts of capacity for Amazon. This deal provides a tangible valuation model for miners successfully leasing their power-heavy facilities to tech giants.
From Bitcoin Rigs to AI Gigafactories
The transition from bitcoin mining to AI infrastructure is a logical one. Crypto miners have years of experience in securing large-scale, low-cost power contracts and managing high-density computing facilities—the exact expertise required for building and operating the data centers that power AI models.
Hive Digital Technologies, which began pivoting from being a pure-play Bitcoin miner in 2022, provides a clear example. Its subsidiary is now building what it calls an "AI Gigafactory" in Canada, a project expected to cost around C$3.5 billion ($2.55 billion). Similarly, Keel Infrastructure has told investors it expects to sign leases for three AI data center sites this year, with a combined gross capacity of 478 megawatts.
The New Valuation Metric: Power, Not Price
For these companies, the key metric is shifting from the price of Bitcoin to the number of gigawatts in their development pipeline. While Iren and Cipher Mining have larger announced pipelines of 5 GW and 4.2 GW respectively, the race is on to secure deals.
The business model, as demonstrated by Keel and Cipher, focuses on building and managing the data centers while customers bring their own expensive AI chips. This reduces capital expenditure for the miners compared to competitors who purchase GPUs themselves. While the industry is capital-intensive, requiring firms like Keel to issue convertible bonds to fund expansion, the demand for AI processing power shows no signs of slowing down, placing these power-rich crypto miners in a strong position.
This article is for informational purposes only and does not constitute investment advice.
