Bitcoin miners reveal the real AI scarcity trade
XLK•Bitcoin miners with power capacity are renting it to AI operators, and investors value powered-shell providers more highly than companies building full-service data centers. IREN trades at about 2 times expected 2028 sales, compared with 7.7 to 15 times for three powered-shell providers.
1. Power over computing
Bitcoin miners that secured power for their facilities are now renting it to AI operators. Cipher Digital, TeraWulf and Hut 8 are pursuing powered-shell leases, while IREN aims to provide computing power and operate the underlying infrastructure.
2. Valuation gap
Morgan Stanley analysts foresee 68 gigawatts of U.S. data-center power demand between 2026 and 2028, 38 gigawatts above projected supply. Crypto miners collectively control about 14 gigawatts of operational and planned capacity, Bernstein estimated in November. Hut 8, Cipher Digital and TeraWulf trade at roughly 15, 12 and 7.7 times expected 2028 sales, respectively, compared with about 2 times for IREN.
3. IREN project risks
IREN's $9.7 billion Microsoft agreement includes a 20% prepayment, and the company needs to spend $5.8 billion on AI chips and $3 billion on other costs. Analysts' research suggests the project could generate about $1.6 billion of EBITDA per active contract year; the calculated implied return could be 12% if the chips retain 25% of their initial value. The article notes that newer IREN agreements suggest improving economics, with revenue exceeding $20 million per megawatt.
