US Bitcoin miners face power squeeze as AI data centers devour the grid

Bitcoin miners spent years building out massive power infrastructure across the US. Now AI companies want it, and they're willing to pay handsomely for the privilege.Surging electricity demand from AI data centers, which reached approximately 29.6 GW globally by the end of 2025 (up roughly 200x from 2022), has created a zero-sum competition for grid capacity that miners simply cannot win on economics alone.Bitcoin's network hashrate has dropped from over 1.14 ZH/s to somewhere between 868 and 900 EH/s by mid-to-late 2026. That's a decline of roughly 15-21% from the peak, driven largely by public miners repurposing their facilities for AI and high-performance computing workloads.Publicly traded Bitcoin mining companies have signed contracts totaling between $70 billion and $90 billion for AI and HPC hosting. Some operators project that AI could account for as much as 70% of their revenue by the end of 2026.Hyperscale Data offers one of the more dramatic case studies. The company suspended mining operations at its Michigan facility in September 2026 to pursue a potential $1.2 billion AI contract.The 2024 Bitcoin halving, which slashed block rewards in half, made this decision even easier for many operators. With rewards cut and Bitcoin's price showing volatility after peaking near $126,000 before a notable pullback, mining margins got squeezed from both directions.Bitcoin miners control over 27 GW of planned power capacity across the US, much of it in states like Texas where grid connections are already established. For AI companies, getting new grid connections can take years. Miners already have them.Morgan Stanley has initiated Overweight ratings on miners like Hut 8 and Riot Platforms, specifically highlighting power access as a key competitive advantage.VanEck estimates a $50 billion near-term funding gap for Bitcoin miners attempting to transition their operations to AI workloads. Only about 25% of leased capacity has actually been delivered so far.New York has imposed a moratorium on new or expanding data centers that exceed 50 megawatts. For miners trying to pivot their operations in the state, that's a significant barrier.The question is whether miners can actually execute the transition. That $50 billion funding gap is not trivial. Miners will need to raise capital, secure partnerships, and deliver on contracts that demand uptime and performance standards far exceeding what Bitcoin mining requires.The hashrate decline also has implications for Bitcoin itself. If the trend accelerates and more miners abandon hashing for hosting, the concentration of remaining hashrate among fewer operators becomes a point worth monitoring.