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Bitcoin Mining Stocks Decline Following Microsoft’s Abandonment of AI Data Center Plans
According to Bloomberg, Microsoft has abandoned plans to construct several new data centers that were expected to generate approximately 2 gigawatts of power. Analysts attribute Microsoft’s withdrawal to an anticipated surplus in computing capacity for AI models, as well as the company’s decision to forgo certain collaborative plans with OpenAI, the manufacturer of ChatGPT. Over the past six months, Microsoft has canceled multiple data center leases and postponed plans for additional capacity increases. Bloomberg reports that Microsoft is expected to further slow down data center investments in the second half of 2025, shifting focus to equipping existing centers with hardware and equipment after completing its established $80 billion construction plan. This news has led to a general decline in the stock prices of cryptocurrency mining companies such as Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital, and Riot. This drop in share prices highlights the increasing reliance of Bitcoin miners on AI model businesses following the reduction in mining revenue due to Bitcoin’s “halving” event in April 2024.
Market Reaction and Analysis
However, Mark Palmer, a Benchmark stock analyst, stated in an interview that investors had already anticipated Microsoft’s scaling back of data center plans. He believes that the decline in stock prices is a result of “Microsoft.” According to a previous report by Zombit, a March report from Coin Metrics indicated that miners are diversifying their income by transitioning to AI data center hosting and repurposing existing infrastructure for high-performance computing. For example, in June 2024, Core Scientific committed to providing 200 megawatts of hardware capacity to support CoreWeave’s AI workloads. Asset management firm VanEck stated in August 2024 that if Bitcoin mining stocks heavily invest in supporting AI, their total market value could increase by approximately $37 billion.
Microsoft’s Reduction of Computing Capacity Plans
Bloomberg reported on March 26 that analysts at TD Cowen noted that Microsoft has abandoned plans to build several new data centers that were expected to produce about 2 gigawatts of power. Analysts attribute Microsoft’s withdrawal to anticipated surplus computing capacity for AI models and the company’s decision to abandon certain collaborative plans with OpenAI. Over the past six months, Microsoft has canceled multiple data center leases and postponed plans for additional capacity increases. According to Bloomberg, Microsoft is expected to further slow down data center investments in the second half of 2025, shifting focus to equipping existing centers with hardware and equipment after completing its established $80 billion construction plan.
Prospects for Mining Transition to AI
Despite the current unfavorable situation, the shift towards AI is still viewed as a potential growth point for Bitcoin mining. Analysis charts from VanEck indicate that if mining companies successfully transition to AI data center operations, their valuations could significantly increase. However, Microsoft’s planned reductions undoubtedly cast a shadow over this transition, affecting current stock prices and adding uncertainty to miners’ hopes for the long-term prospects of AI business. Ongoing market dynamics and corporate strategy adjustments are worth continued observation.