From mining to AI computing power, why is the 'brilliant transformation' of mining companies so effective?

On January 17, 2026, the cryptocurrency mining company $Riot Platforms (RIOT.US)$ announced a major development: the company paid $96 million for an acquisition deal by selling approximately 1,080 Bitcoins, purchasing 200 acres of land in Rockdale, Texas.

At the same time, Riot signed a data center leasing and service agreement with the semiconductor giant $Advanced Micro Devices (AMD.US)$ , deploying an initial 25 megawatts of 'critical IT load capacity.' This initial 10-year agreement is expected to bring Riot approximately $311 million in revenue, with a total potential reaching $1 billion if three five-year renewal options are exercised.Following this news, Riot's stock price closed up 16% last Friday.

This story is not an isolated case; it reflects a broader wave of transformation across the entire cryptocurrency mining industry: transitioning from simple Bitcoin mining to becoming high-performance computing (HPC) and artificial intelligence (AI) computing power providers. This 'brilliant transformation' has not only salvaged the profitability model of mining companies but also driven a surge in stock prices. Why is this transition so effective?

The logic behind the valuation boost from the transition: from Bitcoin leverage to computing power infrastructure

$Bitcoin (BTC.CC)$ Mining was once a gold mine for mining companies, but as the continuous impact of Bitcoin halving persists, profit margins in this industry are facing severe challenges. Bitcoin halving refers to the event that occurs roughly every four years when miner rewards are cut in half, directly leading to a sharp decline in mining revenue while energy costs remain high.

According to industry data, after the Bitcoin halving in 2024, the gross profit margin of many mining companies dropped from over 70% at its peak to 30%-40%. Pure mining operations are highly volatile, influenced by Bitcoin prices, hash rate competition, and electricity supply, making revenue difficult to predict.

This has forced leading publicly traded mining companies to seek diversification paths, and the rise of AI computing power has provided the perfect entry point.The core of the transition lies in the unique advantages of mining companies: they possess extensive data center infrastructure, low-cost power resources, and highly efficient cooling systems. These facilities, originally used for Bitcoin ASIC miners, can be easily repurposed into GPU clusters for AI training and inference tasks.

For instance, mining companies sign AI hosting contracts to redirect idle power to high-performance computing, offering GPU-as-a-service (GPUaaS). Since AI contracts are often long-term fixed-price agreements, this model not only generates more stable dollar revenue but also significantly improves profit margins, delivering steady cash flow. Industry analysts point out that the profit margin of AI operations can be over 25 times higher than Bitcoin mining, as AI demand is exploding while supply remains relatively scarce.

From a valuation perspective, this transition drives a fundamental reassessment of stock value.In the past, mining companies were valued primarily based on 'Bitcoin leverage,' with share prices fluctuating alongside Bitcoin's price. After shifting to AI, their valuation transitions to a 'computing power infrastructure' model, more akin to data center operators.

Mining companies continue to undergo this transformation.On January 19, according to Cointelegraph, Bitcoin's network hash rate fell below 1,000 EH/s for the first time since mid-September, marking a nearly 15% decline from the 7-day average high of 1,157 EH/s recorded on October 19. In an article posted on X on Monday, Leon Lyu, CEO and founder of StandardHash, attributed the drop in Bitcoin's hash rate to miners reallocating computing power to artificial intelligence computing services in pursuit of higher profit margins.

According to CoinShares, by the end of 2026, the HPC revenue share of some large mining companies is expected to rise from the current 10%-20% to over 50%.This not only reduces reliance on Bitcoin but also attracts investment and partnerships from tech giants such as $Alphabet-C (GOOG.US)$ 、 $Microsoft (MSFT.US)$ and $Advanced Micro Devices (AMD.US)$ , often accompanied by equity pledges or substantial financing, further enhancing the credibility and financial stability of mining firms.

Market reactions confirm this logic. In 2025, the average share price increase of these transitioning mining companies exceeded Bitcoin's gains and outpaced other cryptocurrency-related stocks. Among the top ten best-performing cryptocurrency stocks in the U.S. market, five were AI-transitioning mining firms, including $IREN Ltd (IREN.US)$、 $Cipher Digital (CIFR.US)$、 $Hut 8 (HUT.US)$、 $TeraWulf (WULF.US)$、 $Riot Platforms (RIOT.US)$, among which $IREN Ltd (IREN.US)$Surged over 300%, $Cipher Digital (CIFR.US)$Surged over 200%.

Overview of AI Transformation Stocks in the Crypto Mining Industry

The transition of mining companies to AI computing power has become an industry trend, with both leading enterprises and emerging players accelerating their layout in this field.

$IREN Ltd (IREN.US)$：Transitioning from Bitcoin mining to AI cloud services. In November 2025, signed a significant five-year cooperation agreement with $Microsoft (MSFT.US)$ Microsoft, which prepaid one year's contract amount to support the construction of the company's data center at the Horizon site in Texas. This $9.7 billion deal is expected to generate $1.94 billion in recurring revenue annually.

$Cipher Digital (CIFR.US)$：In September 2025, signed a 10-year initial agreement with Fluidstack, leasing its data center capacity for approximately $3 billion in revenue. $Alphabet-C (GOOG.US)$ Gained the right to purchase a 5.4% stake in Cipher Mining and agreed to guarantee $1.4 billion of obligations under the contract between Fluidstack and Cipher. In November 2025, the company announced a $5.5 billion leasing agreement with $Amazon (AMZN.US)$ Cloud services(AWS).

$Core Scientific (CORZ.US)$：is transitioning from Bitcoin mining to providing high-density data center hosting services for workloads such as AI.

$TeraWulf (WULF.US)$：Committed to AI hosting, TeraWulf signed two 10-year agreements with Fluidstack and will utilize its Lake Mariner data center campus in western New York to deliver over 200 megawatts of critical IT load. The total contracted revenue under the agreements amounts to $3.7 billion, which could increase to $8.7 billion if two five-year renewal options are exercised. $Alphabet-C (GOOG.US)$ Has agreed to contribute $1.8 billion to support project construction as consideration. $Alphabet-C (GOOG.US)$ Will receive warrants to purchase approximately 41 million shares of TeraWulf common stock.

$CleanSpark (CLSK.US)$：In October 2025, announced expansion from pure Bitcoin mining into AI computing.

$Keel Infrastructure (KEEL.US)$：Invested in upgrading its 18-megawatt mining facility in Washington in 2025, enabling it to handle high-performance computing/AI workloads, incorporating advanced NVIDIA Vera Rubin GPUs.

$Hut 8 (HUT.US)$：Operates data centers and mining facilities in North America, actively advancing AI and HPC integration. In December 2025, the company signed a 15-year lease agreement totaling $7 billion with Fluidstack, renting out 245 megawatts of computing capacity at its River Bend data center campus to the latter.

$HIVE Digital Technologies (HIVE.US)$：Announced in July 2023 that it would shift its business focus to cloud computing technologies and AI fields, deploying a new batch of NVIDIA GPU clusters in Quebec by the end of 2024, with a target HPC revenue of $100 million by 2026.

$Applied Digital (APLD.US)$：Launched AI cloud services through its wholly-owned subsidiary Sai Computing and has signed multiple AI clients.

$Riot Platforms (RIOT.US)$：Converted 600 MW of idle power at the Corsicana facility for AI/HPC purposes, suspending Bitcoin expansion; signed a data center leasing and service agreement with AMD.

$MARA Holdings (MARA.US)$：By leveraging existing facilities to expand HPC, in August 2025, MARA acquired 64% of EDF's technology subsidiary Exaion for $168 million in cash. The acquisition aims to expand MARA’s business layout in the artificial intelligence infrastructure sector.

$Bit Digital (BTBT.US)$：In June 2025, the company announced a strategic transformation, gradually phasing out its Bitcoin mining operations to focus on building a company specializing in Ethereum staking and treasury services. Its HPC business operates primarily under the WhiteFiber brand, offering GPU cloud services and managing data centers such as the Enovum platform.

$Galaxy Digital (GLXY.US)$ : In October 2025, Galaxy Digital secured $460 million in private investment to transform its former Bitcoin mining facility in Texas into a large-scale artificial intelligence data center.

$Bitdeer Technologies Group (BTDR.US)$：Through self-developed mining equipment and campus operations, the company is driving the development of AI and HPC businesses.

$Cango (CANG.US)$：In terms of AI computing power, the company relies on distributed operational experience and a global energy setup to create a standardized GPU computing resource pool, focusing on meeting the differentiated needs of small and medium-sized enterprises.

Among these companies, $Core Scientific (CORZ.US)$ 、 $TeraWulf (WULF.US)$ 、 $Cipher Digital (CIFR.US)$ and $IREN Ltd (IREN.US)$ 's transformation has been the most aggressive, achieving a leap from mining to cloud services through deep collaboration with tech giants. $Core Scientific (CORZ.US)$ being directly acquired reflects the strong demand among AI players. $Keel Infrastructure (KEEL.US)$ and$HIVE Digital Technologies (HIVE.US)$ focuses on regional advantages, such as low-cost electricity and GPU upgrades, adopting a more gradual approach to transformation. $Bitdeer Technologies Group (BTDR.US)$ retains its profitable Bitcoin mining operations as a core business while steadily upgrading some mining facilities into AI data centers.

Summary

From the miners of digital gold to the enablers of the AI era, former miners are making a crucial shift from the virtual world to the real economy.

AI demand is in an explosive growth phase, with a global computing power shortage expected to last until 2030.As the risk of power shortages in the US has recently intensified, the market is gradually realizing that the main bottleneck for AI development lies not in chips but in electricity, and miners' power infrastructure perfectly matches AI's high energy consumption needs.Moreover, their geographical locations are often in energy-rich areas such as Texas or northern Canada, which not only lowers the threshold for transformation but also attracts massive contracts.

Overall, the success of miners’ transformation stems from the perfect alignment of industry pain points and market opportunities. By 2026, as more capacity comes online, these mining companies are expected to become a core force in AI infrastructure. Undoubtedly, this transition from mining to AI computing power is reshaping the future of the crypto industry.

Fellow investors, do you see the value revaluation opportunities brought by the transformation of mining companies?

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Editor/Doris

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