BlackRock, Nvidia-Backed Group's $40 Billion Aligned Data Centers Acquisition Highlights Bitcoin Miner Valuation Gap

Executive Summary

An investor group that includes BlackRock and Nvidia has acquired Aligned Data Centers for $40 billion. This acquisition values data center capacity at approximately $8 million per megawatt, a figure 160% higher than the $3 million per megawatt typical for publicly listed Bitcoin miners. The transaction signals a potential re-rating for crypto mining infrastructure and highlights the increasing convergence between artificial intelligence (AI) data centers and Bitcoin mining operations.

The Event in Detail

The acquisition of Aligned Data Centers for $40 billion was executed by an investor group comprising BlackRock, Nvidia, Microsoft, and xAI, from Macquarie Asset Management. Aligned Data Centers operates over 50 sites across the Americas with more than 5 gigawatts of capacity. The deal's valuation, at roughly $8 million per megawatt of capacity, stands in contrast to the valuation of traditional Bitcoin mining powerhouses such as Iris Energy, Riot Platforms, Cipher Mining, and Hut 8, which are typically valued around $3 million per megawatt. This represents a 160% premium on a per-megawatt basis for AI-centric data center infrastructure over conventional Bitcoin mining facilities.

Market Implications

This significant valuation differential suggests a shift in how energy-intensive infrastructure is perceived by traditional capital. Matthew Sigel, head of digital-asset research at VanEck, indicated that if Bitcoin miners can access similar project finance, it could lead to "150%-500% equity upside" for their valuations. The AI boom is driving a surge in demand for data center capacity, leading to a strategic pivot among some cryptocurrency firms. Companies like Galaxy Digital, Bitfarms, and Canaan are already repurposing existing mining assets and data center space to support high-performance computing (HPC) for AI applications.

The financial impetus for this transition is substantial. Bitcoin mining typically yields approximately $0.17 to $0.20 per kilowatt-hour (kWh), whereas revenue from Nvidia graphics processing units (GPUs) utilized for AI workloads can generate $3 to $5 per kWh, an increase of 17 to 25 times. While a 1-megawatt Bitcoin mining operation costs about $1 million, a comparable AI compute facility requires an investment of approximately $15 million, primarily due to specialized GPU hardware. However, AI hosting contracts often span multiple years and billions of dollars, offering predictable and stable revenue streams, a stark contrast to the volatile and halving-dependent rewards of Bitcoin mining.

Expert Commentary

Matthew Sigel's analysis highlights the potential for a substantial re-rating of Bitcoin miner equity should they successfully transition or integrate with AI infrastructure financing models. Similarly, Jeremy Dreier from GoMining Institutional has noted a renewed institutional interest in Bitcoin mining infrastructure, driven by the competition for energy resources with AI data centers. He posits that this competition could usher in a new "heyday" for Bitcoin mining as institutional capital enters the space, seeking to acquire cheaper Bitcoin for their balance sheets.

Broader Context

This transformation represents a broader trend where Bitcoin mining firms are strategically pivoting their energy-intensive infrastructure to serve as AI data centers. This shift leverages existing infrastructure optimized for high power consumption, cooling, and network capabilities. The competition for cheap, sustainable energy between AI data centers and Bitcoin miners is intensifying, with AI firms often outbidding miners due to their higher revenue generation per kWh. This could lead to further industry consolidation, as smaller mining operations face declining profitability and high upgrade costs.

Concerns have been raised regarding the decentralization of the Bitcoin network, as the increasing influence of Big Tech and the concentration of hash power in larger, AI-focused mining firms could introduce regulatory vulnerabilities and centralization risks. However, this evolution also presents an opportunity for renewed institutional investment in the mining sector, as entities seek to secure "virgin" Bitcoin or invest in stable infrastructure plays. Hybrid models, combining both Bitcoin mining and AI hosting, are emerging, offering diversified revenue streams and enhanced resource management flexibility. The rapid growth in AI and cloud computing is driving unprecedented energy demand, leading to increasing regulatory scrutiny and community opposition to the siting of power-intensive facilities, particularly in regions like Texas. This dynamic environment necessitates proactive risk management and adaptation for both data center developers and crypto miners to navigate potential permitting delays and evolving regulatory frameworks.