Author: Sam Bourgi

Translation: Deep Tide TechFlow

Deep Tide Guide: NVIDIA plans to issue bonds of at least $20 billion, reaffirming the strong demand for AI infrastructure. The connection to the crypto circle is that a group of Bitcoin miners is converting idle electricity and factory spaces into AI data centers. HIVE, TeraWulf, Hut 8, and CleanSpark are all on this path, and the real pressure behind it is that mining is becoming increasingly unprofitable, especially after the halving in 2024. This brief report ties together this underlying industry thread.

Chipmaker NVIDIA is reportedly also joining the AI bond trend, planning to issue $20 billion in bonds. This financing further indicates how strong the market demand is for AI infrastructure and data centers, and this demand has opened a new door for Bitcoin miners looking to shift away from their core crypto business.

On Monday, Bloomberg reported that NVIDIA intends to raise at least $20 billion through a multi-tranche bond issuance for AI-related investments and to repay existing debt.

The report cited insiders saying that NVIDIA plans to issue seven different bonds with maturities ranging from two to thirty years. The longest-term bonds are expected to yield about 0.9 percentage points higher than U.S. Treasury bonds of the same duration.

This bond issuance indicates that investors are still keen on funding AI expansion, and it also suggests that one of the most influential companies in the industry believes that the demand for AI infrastructure will remain high.

Source Cointelegraph

NVIDIA is the top supplier of GPUs driving large language models, sitting at the center of the entire AI ecosystem. Its chips are widely adopted by major cloud providers and services, so its capital expenditure plans are always seen as a bellwether for the industry.

This ongoing wave of AI construction has also benefited more and more Bitcoin miners. These miners are beginning to convert their energy-intensive facilities and electricity setups into sites for high-performance computing and AI hosting.

Companies like HIVE Digital, TeraWulf, Hut 8, and CleanSpark, which previously relied almost entirely on Bitcoin mining revenue to survive, are now rebranding themselves as providers of data center computing power, leveraging their existing infrastructure and electricity agreements to capitalize on the growing demand for computational power.

The Mining Business is Still Facing Profit Pressure

The reason miners are desperately shifting towards AI is that the economic calculations of their core crypto business are becoming increasingly difficult, especially evident after the halving in April 2024. The combination of halving and persistently high mining difficulty and operational costs has significantly squeezed profit margins.

Some analysts have described this period as "the most brutal profit environment in history." The result is that many miners have started to liquidate part of their Bitcoin holdings and lower leverage, looking for new sources of income outside of mining.

According to data from TheEnergyMag, from October last year to March this year, Bitcoin miners collectively sold over 15,000 BTC.

Caption: Since Bitcoin surged above $126,000 last October, the liquidation of miner inventories has accelerated

Source TheEnergyMag

Against this backdrop, analysts expect that large mining companies will gradually transform into suppliers of AI infrastructure. For example, Bernstein recently stated that they believe the future value of IREN will largely come from AI infrastructure, reasoning that the company's cloud AI business is growing rapidly.