Nvidia (NVDA) issued a wildly optimistic financial forecast as the chipmaker capitalizes on rising demand for hardware to power the artificial intelligence (AI) revolution pioneered by companies like ChatGPT. That was the talk of Wall Street Thursday as Nvidia’s share price soared.
For Bitcoin (BTC) miners, this is a reminder that they already have the expertise and data center space to join in and run AI applications. Whether they will dive remains to be seen.
“The overwhelmingly positive market reaction” to Nvidia’s news “will prompt other mining companies to follow suit and make their own announcements and allocate more of their power capacity to other forms of computing,” said Ethan Vera, chief operating officer of mining services company Luxor Technologies .
Vera took note of Wednesday’s announcement that Applied Digital (APLD) is collaborating with data center design company Supermicro (SMCI) on its AI cloud offering.
Along with its competitors Hut 8 Mining (HUT) and Hive Blockchain (HIVE), Applied Digital is one of a few miners who have been eyeing diversification of their data center space into other areas of computing for some time. Miners will see better margins on AI than mining, said Applied Digital CEO Wes Cummins — at least ahead of another bull market in bitcoin price.
However, the transition may not be a straight line. High-performance computing like AI and cloud applications “require a different level of infrastructure construction” than bitcoin mining, Vera said. Companies would need to hire engineers to plan their sites differently and sales people to recruit customers, he said.
“It’s not a simple process for a miner to repurpose their mines for AI computing – latency, compliance, cooling, environmental factors (humidity, dust), and power redundancy all need to be considered when modernizing a site,” said Erin Dermer, Hut 8’s senior vice President of Communications and Culture, in imitation of Vera.
While most miners are unlikely to repurpose their facilities for AI, “there are some miners who have always taken a more diverse approach to their operations alongside bitcoin mining, with high-performance computing or edge computing services.” “The rapid growth of AI allows these companies to accelerate the development of these businesses,” said Juri Bulovic, head of mining at Foundry Digital (which, like CoinDesk, is part of the Digital Currency Group).
Meanwhile, Nvidia’s forecast lifts AI-linked crypto tokens, including SingularityNET (AGIX), which is up about 13% on Thursday. According to data from CoinGecko, Fetch.ai (FET) and Render (RNDR) are up more than 5% over the past 24 hours.
UPDATE (25 May 2023, 20:24 UTC): Adds a quote from Foundry Digital’s Juri Bulovic.
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