Transitioning Bitcoin mining sites to AI data centers involves significant cost increases and space constraints, according to Sabre56 CEO Phil Harvey.
Phil Harvey, CEO of Sabre56, highlights that Bitcoin miners currently generate around $1.50 in revenue per terahash each month during this market cycle. As many Bitcoin mining companies explore expanding into data centers to increase revenue, media discussions have focused on the potential shift to high-performance computing. However, Harvey argues that these headlines misrepresent the challenges involved.
He emphasized that operating an AI or high-performance computing data center is considerably more costly compared to running a crypto mining facility. While commercial mining operations typically cost between $300,000 and $350,000 per megawatt, AI data centers require significantly more—ranging from $3 million to $5 million per megawatt. This is an increase of 10 to 15 times.
Additionally, a mining site with a gigawatt of available power can only repurpose approximately 200 megawatts for high-performance computing tasks. Harvey also pointed out that only around 20% of a miner’s assets are typically suitable for repurposing, requiring key elements such as power capacity, data infrastructure, and land.
Another major challenge is physical space. Crypto mining facilities require about 1,000 square feet per megawatt, whereas AI data centers need up to 5,000 square feet per megawatt, significantly increasing the space requirements.
Furthermore, converting crypto mining sites into AI or high-performance computing facilities demands substantial upfront investment. Harvey explained that over 90% of a mining company’s existing infrastructure would need to be replaced to accommodate data center operations.
As Bitcoin miners face declining revenue—reaching an 11-month low in August—they are exploring diversification strategies. One potential solution is entering the AI and high-performance computing markets, raising concerns about energy competition between these two sectors. According to a VanEck report, if Bitcoin miners redirected 20% of their capacity to AI processing and high-performance computing, they could generate an additional $13.9 billion in annual revenue.
