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Two Bitcoin mining companies are winding down operations to focus on AI
U.S.-based companies IREN and Core Scientific have decided to move away from Bitcoin mining, repurposing their data centers to support artificial intelligence (AI). Their latest financial reports show a sharp decline in cryptocurrency mining revenue alongside rapid growth in revenue from AI infrastructure.
Core Scientific plans to completely exit Bitcoin mining by the end of 2026. During the company's third-quarter earnings call, Chief Financial Officer Jim Nygaard said that Core Scientific intends to focus exclusively on providing data center capacity for high-performance computing starting in 2027.
According to its financial report, Core Scientific's self-mining revenue fell to $12.3 million in the third quarter, down from $57.4 million a year earlier. Revenue from hosting other miners' equipment also declined, from $8.7 million to $5.2 million.
As a result, Bitcoin mining generated just $17.5 million, or 7.5% of the company's quarterly revenue. Meanwhile, colocation services accounted for $215.4 million of its total revenue of $232.9 million.
IREN bets on cloud computing
IREN is pursuing a similar strategy, aiming to substantially complete the conversion of its mining capacity to AI infrastructure by December 31, 2026. However, limited Bitcoin mining operations may continue throughout 2027.
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According to IREN's financial results, the company generated $28 million in mining revenue during the quarter ended September 30. This represents a 58% decline from the previous quarter and an 88% drop from a year earlier, when revenue reached $233 million.
During the reporting period, IREN mined 402 BTC, compared with 2,039 BTC a year earlier. Its average operating hashrate fell from 45.3 EH/s to 8.8 EH/s. The company does not hold mined Bitcoin on its balance sheet, instead selling it daily.
As mining operations contracted, IREN's AI cloud revenue surged 182% quarter-over-quarter to $200 million. Total revenue increased 66% to $228 million. The company's net loss narrowed from $684 million to $263 million, while adjusted EBITDA rose from $19 million to $66 million.
Why Bitcoin miners are turning to AI
The shift among Bitcoin mining companies is driven by both growing demand for AI computing capacity and deteriorating Bitcoin mining economics.
In the first quarter of 2026, Core Scientific recorded $266.5 million in impairments related to its mining assets. The company cited falling Bitcoin prices, declining mining profitability, and lower resale values for mining equipment among the reasons.
Core Scientific began expanding into AI infrastructure in 2024 after signing agreements with CoreWeave. Initially, the company viewed this business as a complement to Bitcoin mining, but it later decided to exit cryptocurrency mining entirely.
IREN has also been gradually redirecting investments toward AI infrastructure. The company has secured major contracts with Microsoft and other customers, making cloud computing its primary source of revenue.
As a reminder, VanEck argues that shares of Bitcoin mining companies that have shifted toward AI appear overvalued.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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