Cryptocurrency miners in Texas are shifting their focus to AI operations as they seek to cushion themselves from the volatility in the crypto business. As crypto mining becomes unpredictable, supporting AI companies has emerged as a more lucrative alternative.

This comes as AI has also been touted as a potential game-changer due to its transformative abilities across various sectors. Although a shift to AI may be a solution for the crypto miners, their operations still pose challenges to the surrounding communities.

Texas crypto miners to leverage their existing infrastructure

According to RA, Bitcoin miners already have the infrastructure including expansive data centers in addition to access to power resources. It makes it easier and more suitable for compute-intensive AI operations.

The report states that this could be the logical answer to the woes caused by volatility in crypto markets, which has caused some users to lose their investments.

This week, Lancium, a Houston-based firm, and Crusoe Energy Systems, a Denver firm, announced a multibillion-dollar deal to develop a 200-megawatt data center near the West Texas town of Abinele. The investment will support AI applications, such as those needed in medical research and aircraft design. This facility is the first phase of a bigger 1.2 gigawatt project.

Crypto mining and AI operations put pressure on Texas grid

Lancium and Crusoe’s move to AI is reflective of the broader trend with Bitcoin miners in Texas. In June, the cumulative market value of the major US-listed bitcoin miners hit a record $22.8 billion.

Now, firms like Hut 8 and Bit Digital are diversifying their operations into the AI industry. Bit Digital recently secured a $92 million annual revenue deal to supply Nvidia GPUs. Hut 8 is reportedly on a capital raise of $150 million to expand its data center.

While these businesses continue to gain traction, they are also presenting huge challenges the Texas grid as their operations are creating an unsustainable increased demand for energy. Demand for energy is expected to continue growing driven by increased demand for AI systems.

Last month, the Electricity Reliability Council of Texas revealed that demand for electricity is expected to be more than double by 2030, driven by data centers and crypto mining activities.

Lt. Gov. Dan Patrick recently took to X expressing concerns over the crypto industry and its unsustainable high energy use.

He mentioned that the industry could make more money selling electricity back to the grid than from their mining operations. Apart from the high energy consumption, crypto mining operations are reportedly causing health problems for people in surrounding areas.

In June, a crypto mining facility in Granbury was accused of causing health problems for residents in the area due to excessive noise from the facility. Ailments like cardiovascular diseases, hearing losses, and high blood pressure were among the ailments recorded.

Earlier this week, North Tonawanda officials issued a two-year suspension on all crypto mining activities in the city citing health concerns due to excessive noise pollution coming from data centers.