Share Price Doubles in Four Months... Today's Booming AI Companies Were Once Crypto Mining Firms [Tech Talk]

CoreWeave, Nscale, Iris Energy
Applying Mining Expertise to Data Center Operations
Rapid Growth, but Heavy Debt Poses Risks

Companies that once mined cryptocurrencies like Bitcoin are now transforming into artificial intelligence (AI) enterprises. Notable examples include CoreWeave in the United States, Nscale in the United Kingdom, and Iren in Australia. All of these firms have rapidly built substantial data center infrastructure, drawing significant attention within the industry. The reason cryptocurrency mining companies are excelling in AI is their accumulated experience. Since cryptocurrency mining also involves operating large-scale computer chips, these firms are well-versed in solving challenges such as heat management and electricity supply-key hurdles in data center operations.

Interior view of a cryptocurrency mining facility. It is not much different from a typical data center in that it uses connected graphics processing units (GPUs) to handle mining operations. Getty Images

Companies Shifting from Cryptocurrency Mining to Data Centers

The most successful business transformation among former mining companies to date is CoreWeave, founded in 2017. After going public on the U.S. stock market this May, the company achieved a market capitalization of $23 billion (about 32 trillion won). Its share price has since more than doubled, reaching a market cap of $59 billion (about 82 trillion won) as of the end of last month. On the 15th of last month (local time), CoreWeave also secured a $6.3 billion (about 8.8 trillion won) cloud computing contract with Nvidia.

Nscale's Norway Data Center. Nscale

Nscale is also experiencing explosive growth. Founded last year by cryptocurrency miner Josh Payne, Nscale attracted $1.1 billion (about 1.5 trillion won) in investment from Nvidia and several other investors on the 25th of last month. In addition, Nscale has been entrusted with the construction of the ‘Stargate UK’ project, led by Nvidia, Microsoft, and OpenAI, and plans to build a data center with more than 120,000 graphics processing units (GPUs).

Iren, which began as a clean energy cryptocurrency mining company in 2018, has enjoyed a boom since announcing its strategy to transition into an AI data center company earlier this year. Its share price, which was in the $7 range at the beginning of the year, surpassed $40 by the end of last month. In August, Iren reported revenue of $501 million (about 703 billion won) for fiscal year 2025 (July 2024-June 2025), a 168% increase from the previous year.

Mining Know-how Can Be Applied to Data Centers

The secret behind cryptocurrency mining companies’ rapid rise in the AI market is their accumulated expertise. When mining companies first launched, there were no specialized mining chips available. They bundled multiple Nvidia PC GPU cards and operated them like small-scale data centers. As a result, these companies developed a variety of solutions essential for data center operations. For example, CoreWeave has developed its own software to monitor the status and errors of tens of thousands of data center chips in real time.

Most importantly, the various equipment acquired for mining can be repurposed for data centers. Mining chips generate massive amounts of heat and consume significant electricity during the mining process. Thus, mining companies have actively purchased expensive equipment such as advanced cooling systems and transformers-all of which are also necessary for AI data centers.

Additionally, land and power lines that were secured in advance for mining facilities are proving useful. In Iren’s case, its partnership with a hydroelectric power plant in Australia has allowed it to secure surplus electricity over the long term, accelerating the pace of data center construction. The company plans to operate ‘Sweetwater 1,’ a 1.4-gigawatt (GW) mega data center, by April next year, and to build an additional 600-megawatt (MW) data center by 2027.

AI data centers are highly complex facilities. Managing tens of thousands to hundreds of thousands of GPUs requires careful attention to power management, heat dissipation, emergency fire systems, and more. Currently, there are few companies capable of supplying sufficient power and cooling equipment and managing such facilities over the long term, which is why mining companies have emerged as saviors in this sector.

Expansion Fueled by Debt: "If the Bubble Bursts, Recovery Risks Loom"

While their extensive experience in operating computing equipment and securing power is an advantage, some experts warn that the pace of expansion is too rapid. There are concerns that these companies are taking on excessive debt as they compete to build data centers.

On the 22nd of last month, Forbes reported, "CoreWeave relies on billions of dollars in debt to supply advanced computer chips. While its growth potential is strong, the company is in a very precarious situation."

According to public disclosures, CoreWeave currently holds more than $15 billion (about 21 trillion won) in debt. In the second quarter alone, it paid $267 million (about 374.5 billion won) in interest expenses, a 298% increase from the previous year.

Nscale also borrowed $1.8 billion (about 2.5 trillion won) from global investment bank Goldman Sachs in April, less than a year after its founding. Iren is also raising investment funds through convertible bonds and other means.