Legacy Bitcoin mining operations are increasingly converting facilities into AI data centers, recognizing higher revenue potential from GPU-hosting contracts compared to crypto mining.
Bitcoin mining increasingly competes with artificial intelligence operations for access to large-scale, reliable electricity. According to CoinShares’ Q2 2026 Bitcoin Mining report, this competition is fundamentally altering the operational strategies of publicly traded mining firms, with several companies halting Bitcoin extraction and redirecting capital toward AI and high-performance computing infrastructure.
The financial pressures driving this shift are stark. Bitcoin closed June at $58,400, significantly below the average pre-tax production cost of approximately $75,500 per coin for listed miners. Compounding the challenge, the average hash price—the revenue generated per unit of computing power—dropped to an all-time low of $27.70 per petahash per second (PH/s) daily. CoinShares observed a wide divergence in miner profitability; while several operators continue to spend more on extraction than they recoup from Bitcoin sales, others have maintained viable margins.
Strategic reversals are accelerating across the sector. Core Scientific paid $41.9 million to cancel an order for 15 exahashes per second (EH/s) of next-generation mining rigs. The firm stated it will largely maintain its remaining equipment solely to satisfy existing power contracts while repurposing its facilities. Keel took a more decisive step, fully ceasing Bitcoin mining operations on June 29 and projecting zero mining revenue for the third quarter. Similarly, IREN announced that its transition from mining to AI infrastructure is expected to be largely complete by the end of 2026, noting that its AI cloud revenue already surpassed mining revenue in the previous quarter. As IREN and Cipher finalize their exits, at least 35 EH/s of mining capacity is projected to leave the public mining space.
The economic calculus shifts dramatically when evaluating the underlying physical assets. CoinShares estimates that AI infrastructure generates approximately $1.5 million in annual profit per megawatt, nearly tripling the roughly $500,000 per megawatt yielded by Bitcoin mining. Securing new power capacity for data centers has simultaneously become increasingly difficult. CoinShares highlights that approximately 2,600 gigawatts (GW) of projects are stalled in the U.S. interconnection queue—a volume exceeding the nation’s total currently installed capacity—with average connection delays surpassing five years. Furthermore, data centers account for 87% of the Electric Reliability Council of Texas’s (ERCOT) 410 GW large-load queue.
This grid bottleneck is revitalizing active mining sites, where established power connections carry substantial premium value. A recent transaction valued three fully leased AI facilities in Northern Virginia at roughly $27 million per megawatt, whereas comparable powered but unoccupied capacity controlled by public miners trades for under $3 million per megawatt. However, retrofitting legacy mining operations for AI workloads remains capital-intensive. CoinShares estimates upgrade costs between $8 million and $15 million per megawatt for AI-grade infrastructure, compared to the $700,000 to $1 million per megawatt typically required for mining hardware.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.