Whalesbook
Miners Make High-Stakes AI Bet
HIVE Digital and Keel Infrastructure, once mainly focused on Bitcoin mining, are now directing significant resources toward artificial intelligence (AI) and high-performance computing (HPC) infrastructure. This major industry shift comes as Bitcoin mining economics tighten. HIVE Digital is expanding by raising $115 million through a zero-interest convertible note offering. These funds will expand its global data center footprint and GPU capacity. The company is preparing its Tier III data centers in Canada, Sweden, and Paraguay for both crypto mining and AI/HPC workloads. Keel Infrastructure, formerly Bitfarms, is financing its transition through asset sales. However, a recent sale brought in about $13 million, falling short of expectations. This sale marks Keel's exit from Latin America and supports its focus on North American AI infrastructure, according to CEO Ben Gagnon. Both companies saw their stock prices rise roughly 7% after these announcements, showing investor optimism for their diversification.
Funding the AI Transition
HIVE's capital infusion is part of an aggressive build-out for AI infrastructure, a notoriously capital-intensive field. The company's trailing twelve-month (TTM) Price-to-Earnings (P/E) ratio was around -2.70 as of April 2026, showing current unprofitability, common among many Bitcoin miners. Keel Infrastructure also has a negative TTM P/E ratio, around -5.06 as of April 2026, with a very high forward P/E ratio of 173.51. This suggests a large valuation premium based on future earnings. Keel's revenue for its last reported quarter also missed expectations. The proceeds from Keel's asset sale did not meet initial targets, creating challenges in funding its costly transition. This reliance on financing and asset sales highlights the financial strain of shifting from commodity mining to high-availability data center services.
New Demands in AI Infrastructure
Moving from Bitcoin mining to AI and HPC infrastructure requires a fundamental shift in operations. AI workloads need extremely high uptime guarantees (99.99%), robust cooling, and specialized power management – different from crypto mining needs. The global AI data center market is set for rapid growth, expected to exceed $133 billion by 2034 with a 25.80% CAGR. However, this growing market is also highly competitive, attracting major tech firms and specialized providers. HIVE and Keel must navigate this crowded space, facing established players and potential challenges in securing contracts that demand high operational reliability from AI clients. Analysts offer varied ratings: HIVE Digital has a "Moderate Buy" consensus, while Keel Infrastructure sees sentiment ranging from "Hold" to "Strong Buy."
Key Risks: Execution and Dilution
Despite positive market reactions, major risks loom for HIVE Digital and Keel Infrastructure. Keel's asset sale shortfall raises concerns about its ability to fund its ambitious AI build-out by selling assets. The high capital needed to upgrade data centers for AI clients, along with HIVE's use of convertible notes, presents dilution risks for shareholders. Competitors like Riot Platforms (RIOT) and Marathon Digital Holdings (MARA) are also making similar pivots, often with negative P/E ratios, increasing competition for capital and market share. Riot Platforms, with a market cap around $6.87 billion, is investing in HPC, projected to be 13% of its revenue by 2026. HIVE and Keel must not only acquire hardware but also adapt their operational skills and secure long-term AI hosting contracts in a market dominated by hyperscale providers. These companies have historically shown significant stock volatility, indicating sector risks the pivot may not fully offset.
What's Next for AI Miners
HIVE Digital and Keel Infrastructure are banking on leveraging their existing infrastructure and energy expertise for the AI era. The trend of Bitcoin miners shifting to AI and HPC is expected to grow, with up to 20% of mining capacity potentially pivoting by 2027. Some analysts view this diversification as a necessary step, moving from volatile commodity production to stable, recurring revenue streams akin to industrial real estate. HIVE and Keel's success will depend on their ability to execute these complex operational and financial changes, beat intense competition, and capture demand for AI processing power, transforming their facilities into profitable compute hubs.