Core Scientific halts bitcoin mining hashrate operations to focus datacenter resources on more profitable AI workload revenue.
Bitcoin miners have begun exiting the business entirely, shifting their focus and infrastructure toward AI workloads. As power becomes more valuable for AI tenants, the trend accelerates among both private and public operators.
The clearest sign of a complete exit came from Keel (NASDAQ: KEEL), formerly known as Bitfarms, which shut down its final mining sites—Panther Creek, Scrubgrass, and Sharon—on June 29, following the closure of its Moses Lake facility in April. The company will record zero mining revenue in the third quarter, marking the first listed miner to reach that threshold. Winding down the operations devastated its gross margin, pushing it to negative 285% for the quarter as retired equipment was rapidly depreciated. Keel sold 1,085 BTC for approximately $75 million at an average of $69,100 and plans to liquidate its remaining 1,861 coins before year-end, according to CoinShares' Q2 2026 mining report.
Other operators are actively paying to exit. Core Scientific (NASDAQ: CORZ) reportedly paid Block's Proto division $41.9 million to cancel roughly 15 exahashes per second of next-generation 3nm mining chips—reported to be the most efficient hardware ever built. The company's self-mining gross margin fell 56%, and management stated it runs only enough remaining machines to cover power contracts while converting sites to other uses. Cipher Digital (NASDAQ: CIFR), formerly Cipher Mining, told investors it will cease mining capital expenditures and expects to exit the business entirely by the end of 2027.
Hyperscale Data (NYSE American: GPUS) exemplifies the infrastructure pivot. It cut power to Bitcoin miners at its Dowagiac, Michigan facility on September 1 to prepare the site for an AI colocation tenant. A 20-megawatt agreement with an unnamed California neocloud provider is valued at more than $1.2 billion over ten years, with potential to reach $3 billion if the customer exercises an option for an additional 32 megawatts. CEO William Horne stated that shutting down Bitcoin mining allows the company to concentrate the facility's power and infrastructure on the incoming AI customer. The company's average monthly hashrate declined from approximately 1,066 EH/s in the first quarter to 1,004 EH/s in the second quarter and 940 EH/s in the third—a 6.3% quarterly drop and roughly 12% below the December 2025 peak, per Hashrate Index.
The shift reflects fundamental economics. According to CoinShares, the weighted-average pre-tax cash cost to mine one Bitcoin stood at approximately $75,500 in the second quarter of 2026, while Bitcoin itself traded at $58,400—leaving miners underwater by thousands of dollars per coin. In the fourth quarter of 2025, mining costs reached around $79,995 while Bitcoin traded between $68,000 and $70,000, leaving operators down roughly $19,000 per coin. Public miners have sold more than 15,000 BTC since their treasuries peaked. Meanwhile, AI infrastructure has become the capital magnet: more than $70 billion in AI and HPC contracts have been announced across the sector, including IREN's $9.7 billion Microsoft deal, TeraWulf's roughly $19 billion Anthropic agreement, and Core Scientific's $14 billion-plus in expected contract revenue. Gold advocate and long-term crypto skeptic Peter Schiff argued on X that AI is not a tailwind for Bitcoin but a rival, competing for the same capital, electricity, and data center space.
Once a site converts to AI or HPC colocation, the shift proves essentially permanent. Wolfie Zhao of The Energy Mag observed, "Once that multi-gigawatt power infrastructure has been retrofitted to AI or HPC colocation, there is no turning back," and expects public miners to continue winding down hashing capacity in coming quarters. Regulation reinforces this trend: CoinShares reports at least 225 moratoriums or restrictions on data-center development across 30 states, with 151 still in force. New York enacted the first statewide pause on July 14, 2026. That infrastructure scarcity is reflected in equity valuations—miners with contracted AI or HPC capacity trade at an average of 12.9 times forward sales, compared to 3.7 times for those without, despite more than $100 billion in disclosed backlog currently generating only about $1.1 billion in annualized revenue.
Not all miners have abandoned mining entirely. Bitdeer's chief strategy officer Haris Basit said the company will continue mining alongside its 16-year Anthropic compute deal, betting on a dual-purpose model in which flexible mining fills capacity gaps around contracted AI load.