As Bitcoin miners increasingly pivot toward artificial intelligence and high-performance computing (HPC), many assume their biggest competition will come from cloud giants such as Amazon, Google or Microsoft.
According to Frank Holmes, executive chairman of HIVE Digital Technologies, the reality is far more complex — and far more expensive.
Holmes said the transition from Bitcoin mining to HPC infrastructure is not incremental but transformational.
"An ASIC chip Bitcoin mining data center is going to cost you $1 million per megawatt of electricity," Holmes said. "If you are going to go to tier-three HPC, then it is $10 million for the infrastructure per megawatt. It is ten times greater."
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Beyond simple mining
Holmes said hardware costs are only part of the challenge. Adding advanced chips from Nvidia can dramatically widen the gap.
"The Nvidia chips are going to add another $25 million to that cost," he said, citing estimates from the University of Cambridge that suggest cutting-edge HPC facilities can cost more than 30 times as much as traditional Bitcoin mining infrastructure.
Operational complexity also increases significantly. Unlike mining facilities, HPC data centers require multiple redundant internet connections, backup fuel systems, advanced cooling and far more sophisticated power management.
"When you get an ASIC chip from Bitmain it takes about six hours to unwrap it, plug it in and cash flow," Holmes explained. "(With) the H200s, it is six weeks because you are building a brain."
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Hyperscalers and credibility
Holmes said partnerships with hyperscalers play a critical role in credibility and access to revenue as miners expand into AI computing.
He pointed to industry partnerships such as Core Scientific's alignment with CoreWeave, while other firms pursue relationships with Microsoft, Amazon or Oracle.
"For Bitcoin miners, the big part is onboarding with the other hyperscalers," Holmes said. "CoreWeave is supposedly the fastest to deal with. Oracle has been the most flexible."
Microsoft, he added, is widely viewed as the most difficult partner to work with.
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Governments fuel demand for computing power
Beyond the private sector, Holmes said accelerating global military spending is driving demand for advanced computing infrastructure. Applications ranging from autonomous drones to robotics require massive data-processing capacity.
"They all need data centers," he said.
Governments, he added, are increasingly seeking long-term contracts, which he believes is helping fuel a broader expansion cycle across the sector.
Despite periodic market corrections, Holmes said he remains confident in the long-term outlook. He described the convergence of Bitcoin infrastructure, AI computing and global digital demand as part of a larger secular trend.
"Buy the dips and hold on," Holmes said. "It is not just Bitcoin mining. It is the whole AI and technology sector that is in a secular super cycle."
This story was originally published by TheStreet on Jan 6, 2026, where it first appeared in the Innovation section. Add TheStreet as a Preferred Source by clicking here.
