In the escalating competition for supremacy in the realms of artificial intelligence (AI) and cloud computing, American tech behemoths such as Amazon.com Inc. (AMZN) and Microsoft Corp. (MSFT) are now vying for energy resources traditionally dominated by Bitcoin (BTC/USD) miners.

**What Happened:**
The explosive expansion of AI and cloud computing data centers has triggered an extraordinary surge in electricity demand, far outstripping the growth of the power grid. This surge has resulted in a frenzied scramble for energy, significantly impacting the energy-intensive cryptocurrency mining sector, as reported by Reuters on Wednesday.

**Why It Matters:**
Greg Beard, CEO of Stronghold Digital Mining (SDIG), highlighted the intensity of this competition by stating, “The AI battle for dominance is a battle being had by the biggest and best-capitalized companies in the world, and they care like their lives depend on it that they win.”

Projections from the Electric Power Research Institute suggest that by 2030, data centers might consume up to 9% of the total electricity produced in the U.S., more than double their current consumption levels. Analysts predict that by the end of 2027, up to 20% of the power capacity used by Bitcoin miners could be reallocated to AI operations. Over the past year, both Bitcoin miners and AI data center operators have increasingly competed for identical power assets and contracts.

**Case Studies:**
For example, Marathon Digital Holdings (MARA), the globe’s largest publicly traded Bitcoin miner, had shown interest in acquiring a nuclear-powered data center owned by Talen Energy in Pennsylvania. However, Amazon, with a market capitalization over 350 times that of Marathon, managed to secure control of the center.

Many significant cryptocurrency miners are now shifting strategies from solely focusing on crypto mining to marketing their properties and energy services to AI and cloud computing enterprises. According to research by Morgan Stanley, this strategic pivot could potentially increase the value of their facilities by up to five times.

**Challenges:**
However, several miners have indicated that transferring electricity supplies and infrastructure from crypto mining to tech companies will not be a seamless process. The substantial costs associated with building AI data centers pose significant barriers for many in the crypto mining industry.

The global energy consumption of the cryptocurrency mining industry has been a topic of concern. In 2023, the industry’s energy consumption was comparable to that of Australia’s entire electricity usage, as per a report from the Energy Information Administration (EIA). This high level of consumption has led to intensified scrutiny from governments around the world.

Additionally, the Bitcoin mining industry encountered a particularly challenging second quarter in 2024 due to the fourth Bitcoin halving event, which halved their daily coin yields, according to a report by JPMorgan.

**Market Dynamics:**
At the time of writing, Bitcoin was trading at $59,899, marking a 0.56% increase according to Benzinga Pro.

**Further Reading:**
Bitcoin, Ethereum, and Dogecoin experienced a sluggish start to the week with traders speculating that it “would be good to see minor red.”

This narrative was generated using Benzinga Neuro and edited by Pooja Rajkumari, with market news and data provided by Benzinga APIs.