U.S. technology companies are increasingly purchasing or leasing energy assets held by bitcoin miners.
These moves come as technology companies hurry to secure a supply of electricity for their growing artificial intelligence (AI) and cloud computing data centers.
Those data centers are driving the fastest increase in U.S. electricity demand since 2000. The demand is growing faster than the electricity grid. That means big technology companies, like Amazon and Microsoft, are aiming to secure large amounts of electricity.
Growing power demand is affecting the cryptocurrency mining industry – an industry that uses a lot of energy.
Some miners are making a profit by leasing or selling their power-connected infrastructure and centers. But other miners cannot get enough electricity to stay in business.
Greg Beard is chief of Stronghold Digital Mining, a publicly traded bitcoin mining company based in Pennsylvania.
"The AI battle for dominance is a battle being had by the biggest and best capitalized companies in the world and they care like their lives depend on it that they win," he said. "Do they care about what they pay for power? Probably not."
Electric Power Research Institute is a non-profit energy research company based in Palo Alto, California. It said in May that data centers could use up to nine percent of total electricity produced in the U.S. by 2030. That is more than double their current use. This change comes as technology companies are paying a lot to grow their computing centers.
The International Energy Agency (IEA) says that data centers currently account for about 1 to 1.3 percent of world electricity use. Crypto mining uses 0.4 percent. The IEA says that difference is expected to grow.
Experts expect 20 percent of bitcoin mining power capacity to move to AI by the end of 2027. Over the past year, bitcoin miners have increasingly competed with AI data center owners for the same power production centers and business deals. That is what heads of more than six publicly traded U.S. crypto mining companies told Reuters.
One example took place in Pennsylvania. Marathon Digital Holdings is the world's biggest publicly traded bitcoin miner. Two sources who know about the situation said the company was among those considering a nuclear-powered data center owned by Talen Energy in Pennsylvania. But technology company Amazon bought the center in a deal announced in March.
Many large miners that own land and are connected to power centers are changing the way they do business. They are marketing their property and energy services to AI and cloud computing companies and doing less crypto mining.
"We've gotten a lot of interest from everyone from an Amazon or Google," said Kerri Langlais. He is an official for bitcoin miner TeraWulf. The company has a center in New York that can produce 770 megawatts of electricity.
Core Scientific is a crypto miner that a court recently permitted to restructure after its earlier financial failure. In June, Core Scientific became the first bitcoin miner to announce a major agreement. The deal was to lease its power-connected production centers to the company CoreWeave, which is supported by Nvidia. The deals are estimated to be worth more than $6.7 billion over 12 years.
Several miners have since said they would lease or act as subcontractors to develop AI data centers.
Morgan Stanley said providing electricity for AI and cloud computing could be profitable for big crypto miners. The investment bank said it could make their centers as much as five times more valuable.
Morgan Stanley also said technology companies could save billions of dollars by buying or leasing space from a miner with at least 100 megawatts of electricity production. It said such deals could cut the wait times for a data center to launch by about 3.5 years.
I’m John Russell.
Laila Kearney and Mrinalika Roy reported on this story for Reuters. John Russell adapted it for VOA Learning English.
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Words in This Story
lease – v. to use (something) for a period of time in return for payment
asset –n. something that is of value that can usually be exchanged for money
bitcoin –n. a digital currency created for use in online transactions
electricity grid –n. the system of electricity generation, transmission and distribution that covers a large area of a country
infrastructure – n. the resources (such as buildings or equipment) required for an activity
dominance –n. the ability to control
capitalized — adj. to have a lot of money or to possess the ability to borrow or get money from investors easily
capacity – n. power to produce, perform, or deploy
source –n. the provider of information about a subject
subcontractor – n. an individual or business contracting to perform part or all of another's contract
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