VanEck Warns Bitcoin Miners’ Shift to AI Faces $50 Billion Funding Challenge

VanEck indicates that investors are moving their attention from contract announcements to the risks of execution as miners pursue AI revenue.

— According to a recent report by VanEck, Bitcoin miners transitioning to AI infrastructure are confronting a near-term funding gap of approximately $50 billion, alongside potential long-term capital requirements of up to $221 billion.

— The report highlights that investors are now more concerned with whether miners can effectively finance, construct, and operate data centers, given that only around 25% of the AI and high-performance computing (HPC) capacity leased has been delivered thus far.

— VanEck anticipates that valuations will depend heavily on the quality of power and tenants, favoring miners with investment-grade hyperscaler clients, and cautions that those failing to meet construction deadlines may suffer lasting declines in their valuations.

Bitcoin miners who have spent the last two years rebranding themselves as AI infrastructure providers may be entering a more challenging phase of their transformation: demonstrating their ability to deliver.

In a new report, VanEck contended that the market is beginning to move past the initial excitement surrounding AI-related contract announcements and toward a crucial inquiry about whether miners can successfully finance and build the large data center projects required to support AI clients.

The asset management firm estimates that the sector is facing a combined near-term funding deficit of about $50 billion, with long-term capital needs projected at approximately $221 billion if current development initiatives go ahead.

«Execution, not merely signing contracts, becomes the next premium,» remarked VanEck investment analyst Griffin MacMaster and head of digital asset research, Matthew Sigel, emphasizing that only about 25% of the AI and HPC capacity leased to customers has been delivered so far. Companies that fail to meet construction milestones may face «structural de-ratings» from investors.

This report emerges amidst a significant transformation in the bitcoin mining landscape. Following a decline in mining profitability after the 2024 halving, numerous operators began repurposing their power infrastructure to accommodate AI workloads, betting that tech companies would pay substantially more for electricity and data center capacity than bitcoin miners.

Core Scientific (CORZ) has entered into a multibillion-dollar hosting agreement with AI startup CoreWeave, marking a shift from a bitcoin miner to an AI infrastructure provider. TeraWulf (WULF), Hut 8 (HUT), Iren (IREN), and Cipher Mining (CIFR) have all revealed plans to lease power and data center capacity to AI and HPC clients, while Marathon Digital (MARA), Riot Platforms (RIOT), and CleanSpark (CLSK) are pursuing hybrid strategies that maintain bitcoin mining operations while exploring AI opportunities.

Despite bitcoin’s decline of about 24% since January, along with significant losses for other major public crypto entities, bitcoin miners have generally experienced gains across the sector. RIOT has surged nearly 94% year-to-date, while CIFR has risen by 62%. Other companies are also showing similar upward trends during this timeframe.

This new narrative has contributed to some of the largest stock movements in the crypto sector over the past year, with investors rewarding many of these firms with valuations that increasingly reflect their AI potential rather than their mining operations.

Nonetheless, VanEck contends that valuations remain challenging because investors are attempting to assess businesses caught between two realms: declining mining operations and AI ventures that have yet to yield significant cash flow.

Currently, the firm identifies «energized power» as the clearest valuation metric — the amount of operational power infrastructure available to a company. Firms with signed AI leases command valuation multiples exceeding 10 times energized power, whereas miners still proposing future projects trade at lower multiples.

VanEck also anticipates that the market will place greater importance on tenant quality. Operators serving investment-grade hyperscalers may benefit from lower financing costs and enhanced valuations compared to those collaborating with smaller AI startups.

The report highlighted HIVE, Bitdeer (BTDR), Keel, and IREN as companies with potential upside if they secure additional contracts, while suggesting that MARA, CLSK, and RIOT remain more closely linked to bitcoin’s price fluctuations.

Ultimately, VanEck envisions the industry’s next phase as being less about announcing AI aspirations and more about showcasing the ability to finance, construct, and operate large-scale infrastructure. The firms that succeed, it argues, will be those capable of transforming leased megawatts into functional data centers on schedule and within budget.