Bitcoin Miners are Shifting to AI: Here’s Why
Crypto miners are increasingly pivoting to AI to survive the low return in digital asset mining.
According to Russell Cann (a top-level executive at Core Scientific), several Bitcoin mining entities are hopping on the artificial intelligence (AI) bandwagon for survival. Cann revealed that the company’s cloud computing infrastructure deal with CoreWeave is geared towards expanding the latter’s AI capabilities.
However, the executive clarified that Core Scientific is not pivoting to AI and that the collaboration with CoreWeave is expected to generate $8.6 billion for the firm spanning 12 years.
A Head Start in AI
Numerous companies, including Hut 8 and HIVE, have made significant investments in artificial intelligence (AI) computation instead of concentrating only on Bitcoin mining. However, Core Scientific’s unique business strategy, which places a high priority on creating specialized data center infrastructure, has allowed it to stand out from the competition.
Notably, Core Scientific announced its presence in the AI ecosystem in 2019. The firm overcame many obstacles, such as declaring Chapter 11 bankruptcy in 2022 due to unbearable crypto market conditions.
Furthermore, the company is focused on prioritizing colocation services and data center operations over proprietary mining to push its services’ diversity. Thus, Core Scientific has established a strong foundation in data center infrastructure design and management, which has boosted its pivot towards artificial intelligence.
According to Wolfie Zhao, head of research at mining advisory firm BlocksBridge Consulting, Core Scientific has an advantage over other public mining firms because of its vast experience creating custom infrastructure. He added that artificial intelligence workloads require specialized infrastructure, while high-performance GPUs require a significant financial investment.
The high risks associated with partnering with inexperienced operators make investors wary, as Compass Mining’s Chief Revenue Officer, CJ Burnett, noted. Hence, early adopters like Core Scientific’s strong track record, extensive industry connections, and operational know-how can act as a buffer, guaranteeing their position in the quickly developing AI market.
Partnerships between Core Scientific and CoreWeave
Core Scientific’s long-standing partnership with CoreWeave, which has grown into a multi-billion-dollar agreement, has further contributed to its strength. With this partnership, Core Scientific becomes the biggest GPU hosting provider for CoreWeave, following years of collaboration between them.
Thus, Core Scientific can continue to play a crucial role in developing specialized data center infrastructure while utilizing this partnership to enhance its AI capabilities further.
Notably, Core Scientific and CoreWeave have different roles in this arrangement. CoreWeave, which owns the equipment and software, concentrates on providing clients with cutting-edge computational services, while Core Scientific is responsible for building centers designed for AI clusters.
CoreWeave also finances any infrastructure changes that Core Scientific may need to ensure that both organizations can play to their strengths. Another benefit of this collaboration is that Core Scientific stays on the cutting edge of AI developments while preserving its position in the mining sector.
Meanwhile, Core Scientific argued that it does not support a one-size-fits-all strategy. Rather, its ability to customize infrastructure to fit the unique requirements of various applications—whether for artificial intelligence or Bitcoin mining—gives it a competitive edge.
Chainlink’s AI Tool for Enhancing Financial Data Management
While Core Scientific is making significant progress in integrating AI into mining operations, Chainlink is pioneering the use of AI in the financial industry. Prominent financial institutions have partnered with Chainlink, a decentralized oracle network based on Ethereum, to develop a single blockchain-based system for managing company data.
By creating a “golden record” of data, this project seeks to guarantee accuracy and uniformity throughout the financial sector. Partnerships with large corporations like Swift, Euroclear, UBS, Franklin Templeton, and numerous other well-known banks are part of the project.
Platforms can utilize Chainlink’s large language models (LLMs) and decentralized oracles to address current inefficiencies in corporate data management. Also, accurate information can be accessed with ease, enabling real-time data validation and transfer.
The initiative improves the capacity to process and interpret complex financial data using LLMs like OpenAI’s ChatGPT and other cutting-edge artificial intelligence models, which makes it simpler for institutions to organize and synchronize their records.
Data Security and Privacy in Blockchain Networks
Moreover, Chainlink has launched a set of privacy-preserving tools to secure transactions across blockchain networks, in addition to enhancing data management. These tools, which include the DECO Sandbox, CCIP Private Transactions, and Blockchain Privacy Manager, address the increasing demand for data confidentiality in the financial industry.
In addition, the Australia and New Zealand Banking Group (ANZ Bank) plans to implement Chainlink’s privacy-focused technologies as part of this initiative.
