Private equity (PE) firms are recognizing the value in partnering with bitcoin miners to meet the rising demand for AI computing infrastructure, according to Core Scientific CEO Adam Sullivan in an exclusive interview with CoinDesk.
The increased interest in bitcoin miners stems from the growing need for data centers capable of powering artificial intelligence (AI) machines. While the energy consumption of bitcoin miners is widely debated, the burgeoning AI sector also demands significant power, reportedly equivalent to that of a small country, and this demand is expected to surge.
This energy requirement poses a challenge for AI firms, as investors are heavily funding the sector but immediate access to necessary infrastructure remains limited. Bitcoin miners and their existing data centers offer a lucrative solution for investors, providing readily available infrastructure or opportunities for rapid development.
“Private equity is obviously chasing the data center space right now; even private equity firms that haven’t necessarily done data centers before are evaluating the space,” said Sullivan. These PE firms see value in bitcoin miners because they can help AI firms house their machines in pre-existing mining infrastructure or collaborate with miners to expedite the development of new data centers.
“One of the biggest constraints [for data centers] right now is finding sites that have over 100 megawatts of power and have the high voltage substation’s transformer in place. Those are difficult sites to find, and it just so happens that’s been the criteria for locating bitcoin mining sites for the past four years,” Sullivan added.
Core Scientific recently signed a 12-year, 200-megawatt (MW) deal with cloud computing firm CoreWeave to support AI-related computing needs, with potential for further capacity expansion.
Since the announcement of this deal, Core Scientific has received several approaches from tier-one private equity firms offering financing for additional AI-related partnerships. The deal has spurred renewed investor interest in the bitcoin mining sector, with JPMorgan noting that the deal validates the sector’s involvement in high-performance computing (HPC) and may herald a new era of mergers and acquisitions for bitcoin miners.