As cryptocurrency mining becomes less profitable, Texas crypto mining companies are shifting to support AI companies.
Bitcoin miners, with their expansive data centers and access to significant power resources, are perfectly suited for compute-intensive AI operations, and as mining cryptocurrencies is becoming less profitable, companies are seeing the shift as a logical answer to their problems.
On Thursday, Houston-based Lancium and Denver-based Crusoe Energy Systems announced a multibillion-dollar deal to build a 200-megawatt data center near the West Texas town of Abilene to support advanced AI applications such as medical research and aircraft design, CNBC reported. The facility is the first phase of a larger 1.2-gigawatt project.
Lancium and Crusoe’s shift to AI mirrors a broader trend among bitcoin miners. The combined market capitalization of major U.S.-listed bitcoin miners reached a record $22.8 billion in June. Companies like Bit Digital and Hut 8 are diversifying into AI, with Bit Digital securing a $92 million annual revenue deal to supply Nvidia GPUs and Hut 8 raising $150 million for its AI data center expansion.
But the growing popularity of these operations also presents challenges, particularly for the Texas grid. Last month, the Electric Reliability Council of Texas announced that the state would need to nearly double its energy production by 2030 to meet the intensive power demands of data centers and crypto mining operations.
Lt. Gov. Dan Patrick expressed concerns over the projections.
“Crypto miners and data centers will be responsible for over 50% of the added growth. We need to take a close look at those two industries,” He wrote on Twitter/X. “They produce very few jobs compared to the incredible demands they place on our grid. Crypto mining may actually make more money selling electricity back to the grid than from their crypto mining operations.”
Analysts predict significant growth in data center power capacity, with expectations of it accounting for up to 9% of the U.S. electricity consumption by 2030.
The operations also pose challenges for nearby cities. Earlier this month, TIME reported that a crypto-mining facility was seriously affecting the health of residents in the town of Granbury. TIME reported more than 40 people with serious health problems, including cardiovascular disease, high blood pressure and hearing loss. At least 10 of the residents have to go to urgent care or an emergency room.
The ailments were caused by the extreme noise generated by the crypto-mining facility’s fans, which are used to keep the machines cool. While the proposed data center in Abilene would use liquid cooling systems, it is still uncertain whether the facility’s operations could endanger the health of local residents.
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