Bitcoin miners could increase profitability and improve “bad balance sheets” by allocating some of their energy capacity to the AI and HPC sectors, according to VanEck.

Bitcoin miners have the opportunity to potentially generate around $13.9 billion in additional yearly revenue if they partially transition to providing energy to the artificial intelligence and high-performance computing (HPC) sector by 2027, according to investment firm VanEck.

“AI companies need energy, and Bitcoin miners have it,” VanEck stated in an Aug. 16 report. The firm believes that Bitcoin miners, who face profitability risks from volatile operating costs and Bitcoin’s price fluctuations, may find it beneficial for their financial positions to redirect some of their energy capacity toward the growing sectors.

“Bitcoin miners generally have bad balance sheets, either because of too much debt, too much share issuance, too much executive compensation, or some combination of all three,” VanEck claimed.

VanEck estimates that if publicly traded Bitcoin mining companies shifted 20% of their energy capacity to AI and HPC by 2027, “total additional yearly profits could exceed an average of $13.9 billion per year over 13 years.”

The comments follow recent claims by investment firm Kerrisdale Capital calling the Bitcoin mining industry an “industry of snake oil salesmen.” The firm claimed that, in its current form, Bitcoin mining firms are not viable business models and as a result, deliberately dilute.

“They issue shares, they take those shares to invest in the business. But there are no returns,” Sahm Adrangi, chief investment officer of Kerrisdale Capital, recently told Godleak.

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Meanwhile, VanEck noted that the benefit of Bitcoin miners entering into such contracts is that AI companies are usually willing to provide the financial resources needed for capital expenditure.

Core Scientific, the fourth largest Bitcoin miner by hash rate, recently landed a 12-year contract with AI hyperscaler CoreWeave. This deal is expected to generate over $3.5 billion in revenue by supplying 200 MW of infrastructure.

Meanwhile, Canadian miner Hive Digital Technologies has continued expanding its facilities to offer HPC services to companies in the gaming, artificial intelligence, and graphics rendering industries, according to its Q4 2023 report.

VanEck’s report comes amid a challenging year for Bitcoin miners, following the April Bitcoin halving that cut mining rewards from 6.25 BTC to 3.125 BTC for adding a block to the blockchain.

On Aug. 2, Cointelegraph reported that United States-listed Bitcoin miner Marathon Digital reported revenue of $145.1 million in the second quarter, roughly 9% lower than the $157.9 million that analysts had anticipated.

On April 8, just prior to the Bitcoin halving, CryptoQuant CEO Ki Young Juthe current cost of mining using Antminer S19 XPs will rise from $40,000 to $80,000 after the Bitcoin halving in mid-April. At the time of publication, Bitcoin is trading at $59,550, according to CoinMarketCap data.