Bitcoin Mining Just Changed FOREVER - Anthropic’s $9.1B AI Bet

**Scott Melker** (0:01)
Bitcoin mining just changed forever, all caps forever. Anthropic makes a $9.1 billion AI bet on Riot platforms. Yet again, another Bitcoin miner abandoning us and moving on to Greener Pastures, AKA AI. What does that mean for Bitcoin mining? What does it mean for Bitcoin price? We're gonna unpack all of that today, of course. We've got Andrew and Telman, but we have very special guests. James Butterfield here as well from CoinShares. Let's go.
Good morning, everybody. Happy Tuesday and welcome to whatever room this is. I don't know what that is. I hope that you're all having a wonderful day. I'm jet lagged. And so my brain is not working fully. So I'm going to bring on the guests so that they can bail me out.
Good morning, gentlemen. How are you?

**Ran Neuner** (1:07)
So what percentage is your brain at right now if it normally doesn't work at 100%?

**Mario Nawfal** (1:12)
Where do we fall?

**Scott Melker** (1:13)
I would like to know, Andrew, that nobody's brain works at 100%. I saw the movie Limitless, where you take a pill and it opens all of your brain.

**Ran Neuner** (1:26)
Your brain is the candy shell.

**Scott Melker** (1:29)
Whatever, man. Good morning, James. Welcome to the clown show that is happening.
It's nice to have you here. Let's talk about the first story here, because it's not new, but it's a continuation, which is obviously Riot Platforms surges 20% in pre-market trading on $9.1 billion anthropic deal. This is following Iron and Marathon and basically anyone who can get their narrative switched over to AI. But listen, you very closely have tracked miners. I've had you on for years talking about this. Who's going to be mining Bitcoin once this is all over?

**James Butterfield** (2:10)
Yeah, I mean, it doesn't really surprise me that Riot announced this. I actually went to see that Corsicana site. And they absolutely said outright, no, we're always mining Bitcoin. And here we are now. And I think for a lot of Bitcoin miners, this makes sense. So you need something called the four nines in AI. It's 99.99% uptime. And so that requires an incredibly robust power source and a really decent, fast internet link. And what a lot of these miners have done over the last four or five years is built these mega scale sites that have exactly that, very reliable power sources, particularly in Texas.
And at the moment, if you look at corporate results, around 30% of listed miners' revenues come from AI.

**Ran Neuner** (3:11)
But by the end of the year...

**Scott Melker** (3:12)
I'm assuming that's going to be like 80% or 90% in two years.

**James Butterfield** (3:16)
Yeah, by the end of the year, it will be 70%, 75% based on announcements that these different mining companies have made. So there's potentially a bit of an existential problem here for Bitcoin mining. We've seen the hash rate fall about 10% I think, maybe from its peak.
And so there is this worry. Personally, though, I don't think we should be worried. It makes absolute sense. If you look at the return on invested capital for a Bitcoin miner versus an AI thing, AI is around three times more the return on invested capital on current numbers.
So it really makes sense for them to shift into this. But I don't think they are all going to shift towards AI completely. Some of them are. But it makes sense, I think, to really diversify your revenue streams, for any business it does. So it makes sense to do that. But there will always be a need for load balancing in Texas. When I went there, even at the Corsicana site, you could hear the rigs spooling up and spooling down again, as they're responding to the ERCOT power grid prices, and consequently demand. That won't go away. It's a great way for energy producers in Texas to monetize their unused power. So there will always be a need for it. But certainly these mega scale sites that particularly Riot has created, I think they're going to shift all towards AI. And Bitcoin, interestingly, is going to become more regionalized. You know, essentially Marathon is doing stuff where they're talking about containerized solutions of 10 megawatts. The Corsicana site in Riot, by the way, is 2 gigawatts. That's enough to power 2 million European homes, by the way. Sorry, 1 gigawatt. But, you know, these small containerized solutions of 10 megawatts on the outskirts of town, so low balances, I think what is more the reality for Bitcoin, and it's actually quite a good thing because we'll see a much more decentralized Bitcoin network over time. So I don't think this is necessarily a bad thing. I think what the miners have done with these mega-scale sites is just set themselves up perfectly for AI.