Microsoft has canceled plans to invest in new artificial intelligence data centers in the US and Europe, which caused bitcoin mining stocks to decline.
According to a Bloomberg report and data from Google Finance, tech giant Microsoft reportedly canceled plans to invest in new artificial intelligence data centers in the US and Europe, citing a possible oversupply. This has caused Bitcoin mining stocks to decline.
According to the data, the news caused shares of cryptoN miner companies like Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital, and Riot to fall between 4% and 12%.
Bitcoin Mining Stocks Experience Decline
The stock price declines underscore the growing reliance of cryptocurrency miners on artificial intelligence models for business after the Bitcoin network’s “halving” of mining profits in April 2024.
Mark Palmer, a stock analyst at Benchmark, claims that investors already expected Microsoft to reduce its data centers.
Bitcoin Mining Stocks Could Shoot With Investment in AI-Mark Palmer
According to Palmer, the decline in share price seems to be driven more by stagnation in the price of bitcoin than any other factor, possibly combined with investor fatigue settling over the space as mining difficulty remains near record levels.
According to a March report by Coin Metrics, miners are diversifying into AI data center hosting to expand revenue and repurpose existing infrastructure for high-performance computing. For instance, Core Scientific promised to provide 200 megawatts of hardware capacity in June 2024 to support the artificial intelligence workloads of CoreWeave.
According to asset manager VanEck, if Bitcoin mining companies invest significantly in enabling AI, their market capitalizations could increase by about $37 billion in August 2024.
However, JPMorgan stated in March that miners have suffered this year as falling cryptocurrency prices exacerbate pressures on companies already affected by April’s halving. Additional strain may result from a decline in demand for AI data centers.
Microsoft Cancellation Reduces Computation
According to Bloomberg, analysts at TD Cowen stated on March 26 that Microsoft had canceled plans to construct multiple new data centers that would have produced about 2 gigawatts of electricity.
The analysts cited the tech giant’s decision to forego some planned collaborations with ChatGPT maker OpenAI and a perceived overabundance of computing capacity for AI models as the reasons for Microsoft’s retreat.
According to Bloomberg, Microsoft has postponed plans to onboard additional capacity and terminated several data center leases in the last six months.
According to Bloomberg, as the company completes $80 billion in planned buildouts and shifts its focus to equipping existing centers with hardware and equipment, Microsoft’s data center investments are anticipated to slow even more in the second half of 2025.
