Bernstein: Bitcoin miner deals ease AI power strain

Bernstein reported that Bitcoin mining companies have been signing deals to supply computing capacity and power for artificial intelligence data centers. The firm’s July deal tracker recorded at least one AI-related agreement per week, with combined capacity commitments exceeding 7.5 gigawatts and the contracted equivalent of roughly $150 billion in multi-year contracts.

In a research note published Thursday, Bernstein said third-party computing capacity from miners will remain in demand because access to power is the main bottleneck for expanding AI data centers. The note added that political resistance to building new facilities in the United States has increased the importance of existing power-contracted sites.

Lawmakers and local officials have raised concerns about water use, grid strain and tax incentives tied to large data centers. In Texas, a Senate candidate proposed stronger local approval processes and the repeal of tax breaks for AI facilities. A U.S. senator from Oregon asked data center operators how they would limit groundwater withdrawals after noting that some large sites can use millions of gallons of water per day. The federal government released a Ratepayer Protection Pledge aimed at expanding AI infrastructure without increasing electricity bills for households and small businesses. Several governors said grid expansions to meet AI demand should not shift costs to residential customers and small businesses.

Public miners disclosed major AI agreements in July. Hut 8 announced a 15-year lease for an AI data center campus valued at $9.8 billion. IREN disclosed about $2.8 billion in cloud services contracts with AI developers. TeraWulf signed a 20-year data center lease with AI startup Anthropic that the company said could generate roughly $19 billion in contract revenue. MARA Holdings moved to acquire a Texas site with up to 2 gigawatts of capacity for AI and digital infrastructure, and infrastructure firm Bitdeer expanded into AI cloud services and high-performance computing.

Markets reacted to the announcements. Bitcoin mining stocks recorded double-digit gains on Monday after the Hut 8 and IREN deals were announced. Premarket trading on Thursday showed HUT 8 shares up about 5.2%, IREN up roughly 1.9% and TeraWulf up about 1.5%. The sector-tracking CoinShares Bitcoin Mining ETF (WGMI) was higher ahead of the Nasdaq open.

Bernstein said it remains overweight on the Bitcoin mining sector and has an outperform rating on the names it highlighted, except for MARA, which it rates market perform.

A sector analyst wrote, “IREN is beginning to convert that infrastructure advantage into contracted and more predictable revenue. The biggest risk to my thesis is execution.”

Bernstein’s research note concluded that miners offer an existing pool of power-contracted sites and on-site experience managing large-scale computing operations, which can be repurposed or leased to AI companies facing constraints on building new capacity.