In a recent interview, bitcoin (BTC) miner MARA (formerly Marathon Digital) warned the AI market. The current market would look a lot like the internet boom of the early 2000s, which collapsed spectacularly.
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AI is just like internet boom
The warning came from Fred Thiel, CEO of MARA, during the call with analysts from the research and brokerage company Bernstein. According to Thiel, companies, especially the smaller players, risk building too much infrastructure without sufficient demand. This could lead to financial problems if customers do not generate enough revenue.
This analysis was also supported by Gautam Chhugani of Bernstein, who further explained the warning in a report on Thursday.
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Bitcoin miners and AI: two strategies
This year, the strategies of companies in the cryptocurrency sector have diverged considerably. On the one hand, there are companies such as Core Scientific and Terawulf, which are fully committed to AI and benefit greatly from the growing demand for powerful computers and AI data centers.
On the other hand, there are companies such as MARA, which continue to focus on pure bitcoin mining. They think this gives faster returns and requires cheaper infrastructure. However, Thiel emphasized that despite the current focus on bitcoin, successful crypto companies will integrate AI more often in the future. They use cheap energy to become “energy partners” of AI data centers.
Thiel’s view is in line with recent statements by Jason Les, CEO of competitor Riot Platform, who indicated that he would be open to AI if the right partner and deal structure presented themselves.
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Diversification and AI integration
In addition to the focus on bitcoin mining, MARA has expanded its strategy with investments in their own infrastructure and technology. For example, the company has interests in the bitcoin mining hardware manufacturer Auradine, where Thiel is also a member of the board of directors.
MARA has invested millions in Auradine, giving them access to advanced chip technology specifically developed to improve efficiency. This makes MARA less dependent on external suppliers. Remarkably, Thiel also highlighted the potential of modular data centers powered by residual or flare gas. These data centers are flexible and scalable, making them suitable for the AI sector, especially as demand increases.
In line with this strategy, MARA aims to generate 50% of its revenues from activities outside bitcoin mining, such as offshore operations, within four years.
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Bitcoin Mining and AI: A Cautionary Tale
Ah, the world of technology! It’s a bit like a celebrity at a party—everyone wants to be seen with it, but we all know it can be a disaster waiting to happen. Enter Fred Thiel, the CEO of bitcoin miner MARA (formerly Marathon Digital), who does a manly job of warning us that the AI boom could go belly-up just like the “dot-com bubble.” Talk about a déjà vu moment! Who knew the fortune and folly of tech would give us such a nostalgic thrill? Just remember folks, every good party has its crashers, and it seems AI might just be one of them!
AI: The New Internet Bubble?
During a rather thrilling analyst call (I know, I know, it’s not the stuff of late-night Netflix binges), Thiel shared his concerns about the AI market looking too familiar to that of the early 2000s internet craze. Basically, think of it as building a plush mansion when you can barely afford a studio flat. “Too many companies building too much infrastructure without enough clients,” he warned. So, if you’ve been thinking of throwing stacks of cash at every AI startup you see, maybe pause for a moment and consider the classic lesson of the past—unless, of course, you enjoy burning money.
Backup support came from Gautam Chhugani of Bernstein, who presumably had a crystal ball handy. He elaborated on Thiel’s warning, and by the end of it, we were all left questioning if we should invest in bubble-wrap sales instead.
Bitcoin Miners: The Jekyll and Hyde of Strategies
In what can only be described as one of business’s finest spectacles, companies in the crypto universe are employing vastly different strategies. On one end, we have the Core Scientific and Terawulf brigade, sprinting towards AI with the enthusiasm of a kid in a candy store. “Powerful computers and AI data centers!” they chant, as if it’s a mantra that guarantees amazing returns. Meanwhile, we’ve got MARA, plodding along like a stubborn mule focused exclusively on bitcoin mining—because why change what’s working, right?
But Thiel’s not completely blind to shiny objects. He admits that successful crypto companies will eventually integrate AI, almost like saying you’ll get a loan from your bank when hell freezes over. He added that bitcoin miners might just want to become “energy partners” for AI data centers. Because who wouldn’t want to be in bed with AI when it comes knocking (or demanding energy)?
The Diversification Dance
As if the plot thickens further, MARA has its eyes set on diversifying its gritty bitcoin mining business. They’re investing big-time in their tech infrastructure and the company Auradine, a bitcoin hardware manufacturer. If that’s not a power move, I don’t know what is. It’s like suddenly deciding to become the Swiss Army knife of the cryptocurrency world—useful in so many ways, you might just forget what you’re actually supposed to be doing.
Their ambitions don’t stop there, though! Thiel has his sights set on generating half the company’s revenue from non-mining activities in the next four years. A thrilling venture that may or may not make you reconsider your own nine-to-five job, am I right? And let’s not forget the charm of modular data centers powered by flare gas—because who doesn’t love a multi-functional way to harness the chaos?
In conclusion, whether you’re gleefully riding the AI hype train or sitting back and sticking to the tried and true bitcoin mining, one thing is clear: the tech landscape is as unpredictable as ever. You might want to keep your wallets open, but your minds sharper. Here’s hoping that the next few years are filled with more delightful surprises than disasters. Cheers!
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