Bitcoin Mining Faces New Challenges as AI Competes for Resources
Zach Anderson Nov 14, 2025 11:54
CoinShares reports on how AI is reshaping the Bitcoin mining industry, with miners diversifying into AI and HPC to combat rising costs and diminishing returns.
The Bitcoin mining landscape is undergoing significant transformations as artificial intelligence (AI) and high-performance computing (HPC) emerge as formidable competitors for data center resources. According to a report by CoinShares, the rising costs and diminishing profitability in Bitcoin mining are driving many operations to pivot towards AI and HPC initiatives.
Rising Costs and Strategic Pivots
As of the second quarter of 2025, the average cash cost to produce one Bitcoin for publicly listed miners surged to approximately $74,600, with total costs including depreciation reaching $137,800. This financial strain is compounded by transaction fees dropping to historic lows, comprising less than 1% of total block rewards during recent months. Consequently, miners are exploring diversification into AI and HPC to offset these challenges.
AI and HPC Integration
Bitcoin mining facilities, initially designed for cryptocurrency operations, are now being repurposed to accommodate AI workloads. These facilities, equipped with data-center-grade infrastructure, are well-suited for AI applications, which require higher power density and reliability. However, the transition to AI is not without its challenges. Building AI infrastructure can cost significantly more than traditional mining setups, reaching up to $20 million per megawatt compared to $700,000-$1 million for Bitcoin mining.
Network Hashrate and Efficiency
The Bitcoin network hashrate surpassed the 1 Zettahash/s milestone in August 2025, reflecting an ongoing arms race for more efficient hardware. Despite the increase in hashrate, the hash price, which determines miner revenue, has continued to decline, averaging around $50 per PH/s/day in Q2 2025. This decline in profitability is pushing miners to adopt new strategies, including AI and HPC diversification, to sustain their operations.
Future Outlook
Looking ahead, CoinShares predicts that the network hashrate could reach 1.5 Zettahash/s by mid-2026, further compressing mining margins unless Bitcoin prices see substantial appreciation. The report suggests that only operators with access to low-cost power and the latest hardware will remain profitable. Additionally, the valuation gap between AI-focused and traditional Bitcoin miners is expected to widen as the industry continues to evolve.
For more detailed insights, the full report is available on the CoinShares website.
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