The AI boom is driving M&A activity in the crypto sector as bitcoin miners seek to capitalize on the technology.

• Crypto companies are at the center of a wave of deal-making.
• Bitcoin mining companies are retrofitting their sites for artificial intelligence workloads through a series of transactions.
• The demand for mining facilities is high due to the availability of fiber lines and large amounts of power across the U.S.

Artificial intelligence has propelled crypto companies to the forefront of deal-making.

Bitcoin mining companies have data centers with fiber lines and large amounts of power, making them ideal for AI operations. As a result, their facilities and technology are highly sought after.

The recent bitcoin halving has made it less profitable for miners to generate new tokens. JPMorgan Chase analysts reported that some operators are struggling financially due to the halving and are considering exit strategies.

The burgeoning AI industry and bitcoin miners seeking returns on their investments are driving an increase in mergers, financings, and partnerships.

Core Scientific has announced an expanded partnership with CoreWeave, a startup backed by Intel, which is one of the main providers of the chipmaker's technology for running AI models. Under the deal, Core Scientific will provide 70 megawatts of computing infrastructure to support CoreWeave's operations.

Core Scientific expects to generate an additional $1.2 billion in revenue over 12 years, on top of an existing arrangement that is expected to bring in $3.5 billion. In total, the company plans to provide about 500 megawatts of infrastructure to CoreWeave by the second half of 2025, with the possibility of adding an additional 230 megawatts at other Core Scientific sites.

Core Scientific rejected a $1.02 billion buyout offer from CoreWeave, which was made shortly after their initial agreement. The company, which went public in January after bankruptcy, is currently valued at approximately $1.8 billion.

Adam Sullivan, CEO of Core Scientific, stated in a Tuesday press release that the world is changing and many data centers constructed in the past 20 years are not equipped to meet future computing demands.

Hut 8, a bitcoin mining group, announced that it had raised $150 million in debt from private equity firm Coatue to expand its data center portfolio for AI a day before the announcement.

Hut 8, a crypto mining company based in Miami, has shifted its focus to AI by purchasing 1,000 Nvidia GPUs and securing a customer agreement with a venture-backed AI cloud platform. As a result, AI now accounts for 6% of the company's sales, according to CoinShares.

In the financing announcement, Robert Yin, a partner at Coatue, stated that the broader market is recognizing the value of high-quality power assets due to their scarcity, and Hut 8 has a pipeline of highly attractive expansion assets.

Asher Genoot, CEO of Hut 8, recently announced that his company has finalized commercial agreements for its new AI vertical under a GPU-as-a-service model, which includes a customer agreement that provides for fixed infrastructure payments and revenue sharing.

Bit Digital dumps tokens to buy GPUs

Bit Digital, a bitcoin miner that generates 27% of its revenue from AI, announced on Monday that it had entered into an agreement with a customer to supply 2,048 Nvidia GPUs over three years, doubling the number of processors it has provided to the unspecified client.

Bit Digital has ordered 256 servers from and will soon deploy them at a data center in Iceland. The company expects the contract to generate $92 million in annual revenue. To finance the GPUs, in part, Bit Digital is selling some of its cryptocurrency.

Bit Digital stated that the Company plans to fund the deal using a combination of cash and digital assets on the balance sheet.

Bit Digital entered a sale-leaseback agreement for half of the new GPUs, which will reduce the company's capital outlay. With the leaseback, another company owns those GPUs, and Bit Digital leases them back, generating revenue by providing the technology to customers.

Recently, there has been a significant exception to the trend of crypto deals involving miners.

In recent weeks, Bitstamp, a Luxembourg-based cryptocurrency exchange, was acquired by a trading platform for approximately $200 million in cash.

Bitstamp, a popular cryptocurrency exchange, has 50 active licenses and registrations worldwide and is particularly popular in Europe and Asia. The acquisition of a retail-focused trading app will help Bitstamp strengthen its crypto operations and better compete with Binance.

The regulatory challenges facing Robinhood over its crypto dealings have led to the delay of a deal set to close next year. In May, the company received a Wells notice for its crypto operations, and the Securities and Exchange Commission has also sued Coinbase and Binance.

At the end of the first quarter, Robinhood had $4.7 billion in cash and equivalents. Its stock has increased by 75% this year.

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