Bitcoin Miners: Surprising Beneficiaries of the AI Infrastructure Boom
Introduction
In an unexpected turn of events, cryptocurrency miners, particularly those focused on Bitcoin, are positioning themselves as pivotal players in the booming artificial intelligence (AI) infrastructure sector. Analysts at Bernstein, a prominent research and brokerage firm, recently unveiled insights highlighting how these miners are leveraging their substantial power resources to become essential partners for AI cloud service providers.
The Power Advantage
According to Bernstein’s report, led by analyst Gautam Chhugani, Bitcoin miners have secured access to over 14 gigawatts of grid-connected power—much of it sourced from areas rich in renewable energy. This pre-existing infrastructure gives them a significant edge in a rapidly evolving market where AI providers are grappling with extensive interconnection delays and increasing grid congestion. The analysts noted that this infrastructure advantage could reduce AI data center deployment timelines by up to 75%, giving them a considerable head start compared to new developers facing multi-year wait times.
The Emergence of IREN
Among the ranks of Bitcoin miners, IREN, the leading public miner by market capitalization, has been identified as a top pick by Bernstein analysts, earning an “outperform” rating alongside a recently raised price target of $75. IREN commands around 3 gigawatts of operational and under-development power capacity across North America and has rapidly capitalized on the surge in demand for AI infrastructure.
The company’s strategic investments include the acquisition of over 23,300 GPUs, including NVIDIA’s cutting-edge Blackwell models. Bernstein projects that IREN’s AI cloud operations could exceed a $500 million annualized revenue run-rate by the first quarter of 2026, driven by significant infrastructure projects like a 50-megawatt liquid-cooled data center and a 2-gigawatt hub in Sweetwater, Texas.
Observing Stock Performance
IREN’s stock has shown remarkable growth, reflecting the market’s increasing recognition of its potential in AI infrastructure. It surged 123% over the past month and a staggering 519% year-to-date, showcasing how investors are beginning to see value in Bitcoin mining companies branching out into AI services. Following Bernstein’s price target growth to $75 in September, IREN’s stock has continued to rise, closing at $63.85 recently.
The Dual Role of Bitcoin Miners
Despite IREN’s aggressive shift into AI cloud hosting, it remains one of the largest self-operated Bitcoin miners within the U.S., producing approximately 50 EH/s of hash power. This robust Bitcoin mining operation generates an estimated $1.1 billion in annualized revenue, contributing about $650 million in EBITDA at current Bitcoin prices. This cash-generative aspect is crucial for funding IREN’s rapid AI expansion, with projected total revenue soaring from $286 million in 2024 to an anticipated $2.1 billion by 2027.
The analysts suggest that more than half of this revenue growth will come from IREN’s AI cloud segment, which is expected to achieve around 83% in EBITDA margins.
Bridging Two Economies
Bernstein articulates how Bitcoin miners are effectively bridging two separate compute economies: the volatile nature of Bitcoin mining and the more stable landscape of AI infrastructure hosting. By 2027, they estimate that IREN’s AI and power assets will account for 87% of its enterprise value, compared to just 13% from traditional Bitcoin mining operations. This shift indicates a potential re-rating in the market as miners pivot from producing Bitcoin to focusing on high-margin AI data center operations.
The Historical Context
Starting from 2019 to 2021, Bitcoin miners began securing power infrastructure ahead of the current boom, providing them with scalable power capacity that is already designed for compute-intensive tasks. Bernstein’s report underscores the significance of this historical context, depicting the miners as opportunistic players who were early to the game in terms of power access.
Analyst Perspectives
Chhugani, along with other analysts, maintains long positions in various cryptocurrencies, showing a blend of confidence in both the Bitcoin mining sector and the future of AI cloud hosting.
By navigating this transformative landscape, Bitcoin miners like IREN are not just surviving but thriving, proving that resourcefulness and early strategic investments in infrastructure can yield significant competitive advantages in emerging technology markets.