Bitcoin mining as a profitable business model is becoming harder to justify at the biggest, most expensive sites. 

Network hashrate, which measures the total computing power securing Bitcoin, climbed above 1.1 ZH/s in October 2025 but has since fallen toward 900 EH/s several times. Mining difficulty also dropped 11.16% in February 2026 and another 10.09% in June. 

In simple terms, enough miners switched off that the Bitcoin network had to make mining easier for those still operating.

At the same time, some of the largest mining companies are finding better returns elsewhere. Core Scientific reported a negative 56% gross margin from self-mining in the second quarter, while its data-center colocation business generated nearly $80 million in gross profit. 

At TeraWulf, HPC leasing produced about 71% of quarterly revenue. So, renting out high-powered computing infrastructure for AI and cloud computing is returning more profits. 

So, is AI pushing out Bitcoin miners, and what happens to mining if it does?

The Competition for Premium Power

AI hardware and Bitcoin mining machines are not interchangeable. Graphics processors used for AI are generally uneconomical for Bitcoin mining, while Bitcoin ASICs cannot run large AI models. The competition instead concerns chip-production capacity, capital, land, infrastructure and, most importantly, reliable electricity.

For AI operators, a site with existing substations, grid capacity and fiber connections is considerably more valuable than undeveloped land near a power plant. AI infrastructure must be deployed quickly, but major power projects often take years to complete.

Many mining companies secured suitable land and grid connections before AI intensified competition for them. These sites can now be more valuable as AI data centers than as mining facilities. The industry’s pivot is therefore not simply about selling electricity. It is about monetizing power access that is already available.

That advantage does not apply to every energy source.

AI training and inference generally require stable, highly available electricity. Bitcoin mining can operate more flexibly. Mining machines can switch on when surplus power is available, reduce consumption when supply falls and shut down when the grid is under pressure.

A factory with rooftop solar, for example, can use excess midday generation to operate a small group of mining machines after its normal production needs have been met. The machines do not need to run continuously. Their purpose is to generate value from electricity that might otherwise be curtailed or sold back to the grid at a low price.

The same principle applies on a larger scale. Energy group ENGIE has said it is evaluating battery storage or Bitcoin mining at its Assú Sol solar project in Brazil, where transmission constraints prevent all available generation from being absorbed.

Intermittent solar and wind power can support AI, but usually only when combined with storage, grid electricity or another stable source. That additional infrastructure raises costs.

Mining is better positioned to consume electricity that is cheap precisely because it is intermittent, remote, or difficult to transmit.

Hashrate Will Move, Not Disappear

As large mining companies convert premium sites to AI, some of their machines are likely to enter the secondary market. A rig that is unprofitable in a high-cost data center may remain viable at a site with inexpensive hydropower, surplus solar or stranded energy.

Lower equipment prices cannot compensate for expensive electricity, but they reduce upfront capital requirements and shorten payback periods. Older, less efficient machines may still be economical where power is exceptionally cheap and continuous operation is unnecessary.

This could alter the structure of the mining industry. Publicly listed companies will remain important, but future hashrate growth may increasingly come from private operators, smaller miners and energy producers with direct access to underutilized power.

Bitcoin’s difficulty adjustment also helps the network respond. When miners shut down, blocks initially arrive more slowly. Difficulty subsequently falls, allowing the remaining machines to earn more Bitcoin for the same amount of computing work. Some previously unprofitable equipment may then return to operation.

Lower hashrate still matters because it reduces the cost of attacking the network. However, a temporary decline does not automatically signal a security crisis. The system continually moves toward a new equilibrium shaped by Bitcoin’s price, electricity costs, and machine efficiency.

AI will make premium power sites more expensive and render some mining models uneconomical. It is unlikely, however, to eliminate Bitcoin mining.

Instead, it is separating two markets: reliable, infrastructure-rich power will increasingly flow toward AI, while mining will migrate toward cheaper and less conventional energy.

As long as underutilized electricity exists, miners will continue looking for ways to use it.

Source: BeInCrypto