The world of cryptocurrency mining has become increasingly competitive, with miners in search of alternative revenue streams to make up for lackluster market performance. One crypto miner, a Texas-based firm named Applied Digital (APLD), has found a potentially lucrative solution by venturing into the realm of artificial intelligence (AI) and cloud computing.
On Friday, Applied Digital announced it signed a deal to host AI cloud computing loads in its data centers, a venture that could rake in as much as $460 million over the next 36 months. Shares of the company soared nearly 17% on Nasdaq in the wake of this news. Notably, this is the second AI hosting agreement the firm has made within a two-month span.
Many miners have access to inexpensive electricity and data center infrastructure, making them well-equipped for branching out into other high-performance computing applications like AI and cloud computing. These sectors are expected to continue growing, so it’s no surprise that Applied Digital and others are opting to capitalize on this expansion.
Partnering with hardware manufacturer Supermicro, Applied Digital revealed a prior agreement in May with expected earnings up to $180 million in the following two years. However, as more crypto miners explore the world of AI and cloud computing, challenges arise. For one, they are suddenly thrust into competition against tech giants like Amazon Web Services. Additionally, customer-facing capabilities must be developed, and data center quality often requires improvements.
Another company, Iris Energy (IREN), announced this week that they’re revisiting their strategy in pursuit of high-performance computing clientele. Such strategic moves reflect the broader trend of crypto miners seeking out revenue-generating opportunities beyond their traditional mining operations.
Shifting to AI and cloud computing may seem like a boon for crypto miners like Applied Digital, but it’s also worth considering potential drawbacks. Putting extra focus on these new technologies could arguably divert resources from the firm’s core competency—mining cryptocurrencies. It remains to be seen whether foraying into these emerging markets will ultimately prove worthwhile in the long run.
In conclusion, while the recent moves by Applied Digital and others to explore new revenue streams are undoubtedly fascinating, it’s important to remain grounded in our assessment of their potential successes and drawbacks. The burgeoning fields of AI and cloud computing hold promise, but the crypto mining sector is a complex one that should be approached with caution and a discerning eye.
Source: Coindesk
