Bank of America analyst Michael Funk published a research note Tuesday titled 'Bye Bye Bitcoin. Hello AI data centers,' urging legacy Bitcoin miners to pivot their infrastructure toward artificial intelligence workloads. The report, which circulated among institutional clients this week, argues that the economics of dedicated Bitcoin mining have deteriorated to the point where repurposing energy and hardware for AI data centers offers a more sustainable revenue path.
The research note
Funk's note is blunt. The title alone signals a major shift in how Wall Street analysts view the crypto mining sector. Rather than focusing on hash rate or block rewards, Funk zeroes in on the physical assets miners already own—power purchase agreements, cooling systems, and warehouse space—as valuable for high-performance computing. The analyst estimates that converting a typical mining facility to host AI servers could multiply annual revenue per megawatt by three to five times, though he also warns the transition requires significant upfront capital and technical retooling.
Why miners are pivoting
The timing isn't accidental. Bitcoin's halving earlier this year squeezed margins for miners running older generation ASICs, while the explosion in generative AI has created insatiable demand for data center capacity. A growing number of publicly traded mining companies, including some that Bank of America covers, have already announced pilot programs to lease space to cloud providers or run their own AI inference jobs. Funk's note validates that trend with a thumbs-up from a major sell-side house.
If large-scale miners follow Funk's advice, the Bitcoin network could see a permanent reduction in hash rate as rigs are unplugged or sold. That would make blocks easier to find for remaining miners, at least temporarily, but it also raises questions about long-term network security if too many players exit. Funk doesn't address that directly—his focus is purely on shareholder value. For now, the market is watching to see which miners announce conversion plans in their next earnings calls, due in August.
