Bitcoin Miners at a Crossroads: Core Scientific's AI Gold Rush vs. Canaan's Retreat

The digital asset mining sector is witnessing a dramatic strategic divergence, highlighted by two contrasting narratives. On one end, Core Scientific (CORZ) is riding a wave of AI-driven optimism, with analysts at Cantor Fitzgerald suggesting a potential buyout from cloud computing firm CoreWeave could value the company at over $30 per share. This projection, detailed in a research note, represents a near-doubling of its stock price, which had already surged 33% to close above $16 on Thursday following reports of advanced acquisition talks. The bullish valuation underscores a significant shift in how the market perceives the underlying assets of Bitcoin miners, moving from pure-play crypto exposure to high-demand AI infrastructure providers.

Valuing the AI Pivot: From BTC Volatility to Stable Cash Flows

Cantor Fitzgerald's optimistic case for Core Scientific is not based on its Bitcoin mining operations but on its strategic pivot to servicing the artificial intelligence boom. The cornerstone of this valuation is a massive 12-year, $3.5 billion contract signed with CoreWeave to supply 200 megawatts of power for AI compute. According to the analyst note, this long-term infrastructure lease alone is worth an estimated $24 per share, applying a conservative 15x profit multiple typical for data center REITs. This provides a stable, predictable cash flow stream, a stark contrast to the volatile and cyclical revenue of BTC mining, which is subject to both Bitcoin's price swings and the quadrennial halving events that slash rewards. Further adding to the valuation, Cantor estimates the replacement value of Core Scientific's remaining 570MW of power infrastructure at an additional $11.70 per share, cementing the argument that the company is significantly undervalued even after its recent rally.

This sentiment is echoed by fintech and AI-focused firm Rittenhouse Research, which argued in a May report that the most forward-thinking crypto companies are leveraging their data center assets for AI. The firm noted that the infrastructure once used for mining "digital gold" is now more valuable when used to process AI algorithms. This strategic pivot recognizes that while Bitcoin's price remains unpredictable, the demand for AI computing power is experiencing exponential, secular growth. This strategic realignment is becoming a key differentiator for investors, who are increasingly rewarding companies that can secure long-term, high-margin contracts in the AI space over those solely dependent on the fluctuating profitability of mining BTC. While the broader crypto market sees volatility, with BTC trading in a range between $107,500 and $109,650 over the past 24 hours, the stability offered by AI contracts presents a compelling alternative for capital allocation.

Not All Pivots are Created Equal: Canaan's Strategic U-Turn

However, the path to diversification is fraught with challenges, and not every miner's attempt to pivot has been successful. In a stark counter-narrative, Singapore-based mining machine manufacturer Canaan Inc. (CAN) announced it is shuttering its AI semiconductor business to refocus entirely on its core Bitcoin mining operations. The company stated that its AI unit, which generated minimal revenue ($900,000 in 2024) while consuming 15% of operating expenses, failed to align with its long-term strategy. This move signals the immense difficulty and capital-intensive nature of competing in the specialized AI chip market against established giants. The market's reaction has been brutal; Canaan's stock has plummeted nearly 75% in the last six months, closing at just 63 cents on Thursday. Similarly, Bit Digital's move to dump Bitcoin rigs for Ethereum staking was met with skepticism, as its stock fell 15% during Thursday's session. These examples illustrate that a pivot is not a guaranteed success and that execution, market timing, and competitive landscape are critical factors. For Canaan, CEO Nangeng Zhang emphasized that doubling down on their core strength in crypto infrastructure is the most strategic path forward. This retreat highlights the risk for smaller players trying to enter the hyper-competitive AI hardware space, suggesting that leveraging existing power infrastructure, like Core Scientific, may be a more viable strategy than attempting to build new technology from the ground up.