A seismic shift is underway in the digital asset space, as the immense computational power once dedicated to Bitcoin mining finds a potentially more lucrative home in artificial intelligence. This trend was dramatically highlighted late Thursday when shares of Bitcoin miner Core Scientific (CORZ) surged over 33% to close above $16. The catalyst was a report from The Wall Street Journal detailing advanced talks for a buyout by AI cloud compute provider CoreWeave. This news prompted a bullish research note from Cantor Fitzgerald, which suggested that CORZ could be valued at over $30 per share in an acquisition, representing a potential doubling from its current trading levels. The proposed deal follows a previously failed offer of $5.75 per share from CoreWeave in 2024, underscoring the explosive growth in valuation for AI-related infrastructure over the past year.

Core Scientific's AI Pivot Sparks Massive Rally

The foundation of Cantor Fitzgerald's optimistic valuation lies in a landmark deal signed between the two companies earlier in 2024. Core Scientific secured a 12-year, $3.5 billion contract to provide CoreWeave with 200 megawatts (MW) of power for its AI operations. According to Cantor's analysis, the long-term cash flow from this single agreement is worth approximately $24 per share, based on a conservative 15x profit multiple common for data center real estate investment trusts (REITs). Furthermore, the firm assigns an additional $11.70 per share for the replacement value of Core Scientific’s extensive 570MW of existing power infrastructure. This combination of stable, long-term AI-driven revenue and tangible asset value presents a compelling case for traders that the market is still undervaluing CORZ, even after its significant one-day rally.

The Broader Trend: From Digital Gold to AI Algorithms

This strategic pivot is not an isolated event. A May report from fintech and AI-focused firm Rittenhouse Research argued that the most forward-thinking crypto companies are diversifying away from pure-play Bitcoin mining. They are instead repurposing their infrastructure to serve the insatiable demand for AI compute. The report highlighted Galaxy Digital's 2022 acquisition of the Helios data center, a move initially seen as a rescue of a distressed miner that has since proven to be a prescient investment in AI infrastructure. The core argument, as Rittenhouse stated, is that "the infrastructure used to mine digital gold is better used to process AI algorithms." This is because AI contracts offer stable, predictable cash flows, insulating companies from the extreme volatility of the BTC price and the periodic revenue shocks caused by Bitcoin's four-year halving cycle. This provides a compelling narrative for investors looking for exposure to the AI boom through publicly traded companies with existing, hard-to-replicate energy and data center assets.

Navigating Risk and Regulation in the AI Era

However, the transition from BTC mining to AI is not without its risks, and not every company has navigated it successfully. Recent market activity showed that Bit Digital's stock fell 15% in a single session after announcing a pivot away from Bitcoin rigs and towards Ethereum staking. Meanwhile, hardware manufacturer Canaan, which once had ambitions in the AI chip space, has shuttered that unit entirely, with its stock plummeting nearly 75% over the last six months to close at just 63 cents on Thursday. These examples serve as a stark reminder for traders that execution and strategy are paramount. Core Scientific appears to have found a successful middle ground, leveraging its existing footprint to secure a major AI client rather than attempting to build a new business from scratch. As this M&A story develops, the market will be closely watching the performance of related assets. The ETH/BTC pair, for instance, showed strength with a 4.55% gain, while AI-adjacent infrastructure plays like Avalanche (AVAX) also saw a significant 6.73% rise against BTC, suggesting a broader sector rotation may be in its early stages.

Adding another layer to the evolving landscape, U.S. Senator Cynthia Lummis has introduced the Responsible Innovation and Safe Expertise (RISE) Act of 2025. This proposed legislation aims to bring regulatory clarity to the use of AI by creating a liability framework. It would hold professionals accountable for their AI-assisted advice while shielding AI developers from civil liability if they provide comprehensive public disclosures through "model cards." These documents would detail an AI's training data, intended uses, and limitations. While the bill stops short of mandating open-source models, it requires developers to justify any redactions based on trade secrets. In a prior interview, Simon Kim, CEO of Hashed, voiced concerns about the dangers of centralized, closed-source AI, stating, "Making this type of foundational model is similar to making a 'god', but we don't know how it works." This legislative push, combined with the market's reaction to the CoreWeave deal, signals that the intersection of AI, finance, and cryptocurrency is rapidly maturing, creating both unprecedented trading opportunities and complex new risks.