Microsoft’s Data Center Shift: Ripple Effect on Bitcoin Mining Stocks

Recent reports indicate a downturn in Bitcoin (BTC) mining stocks following Microsoft’s decision to scale back its investments in new AI data centers. Bloomberg and Google Finance data reveal a significant drop, with shares of major miners like Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital, and Riot experiencing declines ranging from 4% to 12%.

This development underscores the growing reliance of cryptocurrency miners on AI-related business, particularly in the wake of the April 2024 Bitcoin halving, which impacted mining revenues. As Coin Metrics noted in a March report, miners are increasingly diversifying into AI data-center hosting to bolster revenue and utilize existing infrastructure for high-performance computing.

Examples of this diversification include Core Scientific’s June 2024 commitment of 200 megawatts of capacity to support CoreWeave’s AI workloads. Furthermore, VanEck’s August 2024 assessment suggested a potential $37 billion increase in market capitalization for Bitcoin mining stocks if substantial AI investments materialize.

However, challenges persist. JPMorgan’s March report highlighted the struggles faced by miners this year due to declining crypto prices and the halving’s impact. The reduced demand for AI data centers, as evidenced by Microsoft’s actions, could exacerbate these existing pressures.

Microsoft’s Retrenchment: TD Cowen analysts reported that Microsoft abandoned plans for several new data centers, representing a loss of approximately 2 gigawatts of power, citing an oversupply of computing capacity for AI and scaled-back collaborations with OpenAI. Bloomberg reports further indicate that Microsoft has canceled data center leases and delayed capacity onboarding plans.

The slowdown in Microsoft’s data center investments is expected to continue into the second half of 2025 as the company focuses on its existing infrastructure and completes $80 billion in planned buildouts.