Convergence of AI and Bitcoin Mining at State-of-the-Art Data Center in Texas

Applied Digital Opens 200MW Data Center in Texas

Applied Digital, a blockchain and artificial intelligence (AI) infrastructure provider, has launched its new 200-megawatt (MW) data center in Garden City, Texas. This facility is the company’s third blockchain hosting facility in North America. Once fully operational, it will bring Applied Digital’s total hosting capacity to 480MW across its blockchain hosting facilities. Riot Blockchain, another Bitcoin miner, also operates a 1GW mining facility in Texas.

The Power Behind Bitcoin Mining

Bitcoin miners require significant power to produce the hashes necessary for constructing the network’s next block of transactions. Cambridge estimates that the entire Bitcoin network currently demands 14.83 GW. To provide some context, a standard home light bulb is powered by just 60 watts. Applied Digital’s data center will support 7-8.5 EH (exahashes) depending on the model of miners.

Applied Digital’s Hosting Business Model

Applied Digital operates as a hosting service for other mining companies. It houses and operates rigs on behalf of these companies, earning $22 million in revenue during the quarter ending in May 2023. However, Applied Digital is shifting its focus away from Bitcoin mining and towards high-performance computing (HPC) for the AI industry. HPC requires large data centers, cooling systems, and cheap energy to operate profitably.

The Move Towards HPC

HPC-cloud services are considered more profitable per unit of energy than Bitcoin mining. Applied Digital plans to expand its operations solely for HPC/AI workloads moving forward.

Investor Reaction

Despite this strategic shift, investors have yet to be convinced. Applied Digital stock fell by 5.3% on the NASDAQ following the announcement of the new data center.

Hot Take: Applied Digital Expands Hosting Capacity with New Texas Data Center

Applied Digital has opened a 200MW data center in Garden City, Texas, marking its third blockchain hosting facility in North America. This move brings the company closer to its goal of achieving a total hosting capacity of 480MW across all its facilities. The facility will support Bitcoin miners, providing the necessary power to generate hashes for the network’s transactions. However, Applied Digital is shifting its focus towards HPC for the AI industry, which offers greater profitability per unit of energy. Despite this strategic shift, investor response has been lukewarm, as reflected in the decline of Applied Digital’s stock price.