As Bitcoin mining companies attempt to diversify operations into data centers to bolster revenue, the headlines have been dominated by this purported shift to high-performance computing. Phil Harvey—CEO of blockchain data center consulting firm Sabre56—sat down with Cointelegraph to explain why these headlines are unrealistic.

Harvey stressed that running an AI or high-performance data center is substantially more expensive than running a crypto mining facility. The CEO said a typical commercial mining operation costs between $300,000 and 350,000 per megawatt to run. In contrast, AI data centers cost between $3 million and $5 million per megawatt to run—a 10-15x increase.

According to the CEO, a mining operation with a gigawatt of available power will only be able to convert a maximum of roughly 200 megawatts of power for high-performance computing needs. The CEO told Cointelegraph:

"There's probably around 20%, I would imagine, of each miner's portfolio that is actually capable of delivering key attributes like power, data, and land in order to facilitate AI."

Harvey said physical space was a major concern, citing the 1,000 square feet per megawatt required for crypto mining versus the 5,000 square feet per megawatt required for AI or HPC data center applications.

Moreover, converting crypto mining facilities to AI and high-performance data centers also carries significant upfront costs, Harvey explained—noting that 90% or more of a mining company’s existing infrastructure would have to be replaced to retool the facility for data center usage.

Related: Bitcoin mining CEO eyes hashrate contracts to offset rising costs

Bitcoin miners search for a way out of the post-halving reality

Bitcoin miners experienced the worst revenues in 11 months during August. This squeeze, produced by the decreased block subsidy in April, has driven mining companies to seek other revenue streams.

The seemingly obvious alternative floated by industry executives was a shift to the adjacent field of AI data centers and high-performance computing—sparking fears that the emerging AI industry would siphon much-needed energy resources away from crypto mining.

Converting mining sites to AI data centers isn't seamless: Sabre56 CEO image 0

VanEck’s projected revenues and profits for public mining companies that choose to embrace the data center strategy. Source: VanEck

In a recent report, VanEck claimed that Bitcoin mining companies could gain $13.9 billion in yearly revenues if they dedicated 20% of their output to AI data processing and high-performance computing.

Magazine: AI may already use more power than Bitcoin — and it threatens Bitcoin mining