Bitcoin mining stocks plummet as Microsoft abandons data center expansion
Bitcoin mining stocks fall as Microsoft cuts AI data center plans
Shares of leading Bitcoin mining companies declined sharply on March 26 following reports that Microsoft is pulling back from planned investments in new data centers in the U.S. and Europe.
The decision, attributed to a potential oversupply of AI compute capacity, triggered a sell-off among crypto miners increasingly dependent on artificial intelligence partnerships to offset declining core revenues, reports Cointelegraph.
Mining firms Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital, and Riot saw stock prices drop between 4% and 12%. The dip underscores growing market concerns over miners' exposure to AI infrastructure contracts, which have become a vital source of diversification.
AI as a lifeline for miners
With mining rewards cut in half, miners have been repurposing infrastructure for AI workloads. A March report from Coin Metrics noted that companies are “diversifying into AI data-center hosting” to maintain revenue and leverage their high-performance computing facilities. Core Scientific, for instance, pledged 200 megawatts of capacity to CoreWeave’s AI operations in mid-2024.
Asset manager VanEck estimated in August that aggressive AI investments could add as much as $37 billion to the collective market cap of mining stocks. However, falling demand for AI compute, combined with weak crypto prices, poses new challenges to that strategy.
Microsoft’s strategic shift
Microsoft has canceled plans for multiple new data centers, which would have added roughly 2 gigawatts of computing power. The move reflects reduced expectations for near-term AI infrastructure demand and follows Microsoft's broader reassessment of its partnerships with OpenAI.
Microsoft has scrapped several leases and postponed new capacity rollouts over the past six months. While the company is still on track to complete $80 billion in planned infrastructure buildouts by late 2025, further investments are expected to slow as Microsoft focuses on upgrading existing facilities.
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