It's been over a week since we last shared insights on public Bitcoin miners, but rest assured, we've been busy! From expanding our team to moving office, a lot has been happening behind the scenes. But guess what? We have some exciting new features on the way-I'll dive into those in a separate post.
For now, let's talk about something that has been heating up in the Bitcoin mining world: HPC hosting. With AI being one of the hottest topics in tech and investment circles, it's no surprise that some Bitcoin miners are jumping on the trend to diversify their revenue streams, especially as they navigate challenges of the post-halving era.
Who’s Leading the Charge in HPC Hosting & AI Cloud?
When it comes to embracing HPC and AI hosting, a few miners stand out. Core Scientific (CORZ), Iris Energy (IREN), and Bit Digital (BTBT) have been making headlines, while others like Hut 8 (HUT), TeraWulf (WULF), and Bitdeer (BTDR) have been a bit quieter on this front.
Let's dive into the numbers👇
Bit Digital, despite being a smaller-cap company (ranking #15 out of 30 by market cap at the time of writing), generated a significant $12.497 million in revenue from their HPC hosting in Q2 2024, leaving peers far behind. According to their quarterly filing, they deployed 2,048 GPUs in early 2024 at a specialized data center and are considering an upgrade to newer-generation NVIDIA GPUs. This upgrade led to a temporary delay in their purchase order, but the company still received a $30 million non-refundable deposit from the customer. With HPC hosting accounting for 43.17% of their total revenue in Q2, it’s clear that Bit Digital is shifting focus from digital-asset mining—and they’re doing pretty well, especially when you consider their gross margins compared to peers.
Core Scientific is well-known for their partnership with CoreWeave. The company has secured long-term contracts to host CoreWeave's HPC operations. Currently, Core Scientific dedicates 16MW to CoreWeave operations in Austin, Texas, with plans for further expansions across multiple sites, totalling 200 MW. This deal is expected to bring in over $6.7 billion over the next 12 years. However, HPC hosting still contributes only a small portion of their total revenue. Despite this, with their significant investments in HPC infrastructure and ramped-up marketing and sales efforts, we can expect this sector to become increasingly important to their business.
Iris Energy is another miner making waves with its HPC/AI business. Just yesterday, they shared their FY 2024 results, highlighting rapid growth in their AI cloud services. According to their presentation slides, IREN operates 816 Nvidia H100 GPUs, serving multiple customers. Although this sector contributed only 1.64% to their total revenue last year, we can expect its contribution to grow.
The Quieter Players in HPC Hosting
Hut 8 brought in $3.365 million from HPC, accounting for nearly 10% of their total revenue. While they didn’t disclose details on their GPUs, we know their HPC operations span five locations in Canada, including Mississauga, Vaughan, Kelowna, and two sites in Vancouver. There's definitely more to explore here.
Hive is a pioneer among Bitcoin miners when it comes to HPC hosting. They generated $221,000 from HPC in Q2 2023, which grew to $2.605 million in the same quarter of 2024—a massive 1078.73% YoY growth. However, we should note that their associated sales costs for HPC also grew from $147,000 to $1.955 million (+1229.93% YoY). As a result, their HPC gross margin dropped from 33.48% (Q2 2023) to 24.95% (Q2 2024).
Bitdeer is an interesting case. Despite being Nvidia’s preferred partner in Asia since last November and announcing the completion of their NVIDIA DGX SuperPOD H100 system deployment in March, their latest quarterly report doesn’t provide much insight into how this has impacted their overall business. It’s something to keep an eye on.
TeraWulf has been advancing its efforts to support a large-scale HPC and AI project at the Lake Mariner Facility. According to their latest quarterly report, TeraWulf committed an initial 2 MW block of power to this project, capable of supporting thousands of GPUs. In Q2 2024, they purchased a 128-GPU cluster from NVIDIA, financed by a leading OEM. To support this project, they’ve upgraded their internet interconnection and designed a closed-loop liquid cooling system for the GPUs – all to ensure power supply redundancy for 100% reliability.
Did We Miss Any?
Are there other public miners that have ventured into HPC hosting or AI cloud services? Let us know, and we’ll dig into their public filings next time.
Update on September 3rd, 2024: Following community feedback, we identified a few Bitcoin miners that were missed in our coverage. Applied Digital, Mawson Infrastructure, and Soluna are also allocating resources to AI/HPC hosting. You can read the latest updates about these companies here.
Disclaimer: The views expressed in this article are my own and are based on publicly available information. This content is intended for informational purposes only and should not be construed as investment advice. Readers are encouraged to conduct their own research before making any investment decisions. Past performance is not indicative of future results. No recommendation or advice is being provided as to the suitability of any investment for any particular investor.
