Bitcoin mining stocks fall after Microsoft abandons data center plans

Microsoft has reportedly cut plans to invest in data centers in the U.S. and Europe, sending cryptocurrency miner stocks tumbling on March 26.

Bitcoin (BTC) mining stocks fell as Microsoft reportedly canceled plans to invest in new AI data centers in the U.S. and Europe, citing a potential oversupply, according to a Bloomberg report and data from Google Finance.

The data showed that the share prices of cryptocurrency miners Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital and Riot generally fell after the news, with declines ranging from 4% to 12%.

The pullback in share prices highlights the increased reliance of cryptocurrency miners on AI models, especially as mining revenue decreases after the Bitcoin network’s “halving” in April 2024.

Benchmark equity analyst Mark Palmer said investors had long anticipated Microsoft’s data center investment cuts.

“The pullback appears to be driven more by stagnant Bitcoin prices, possibly coupled with investor fatigue, especially as mining difficulty approaches all-time highs,” he told Cointelegraph.

CORZ intraday performance on the Nasdaq.

Coin Metrics said in a March report that miners are “diversifying into AI data center hosting to expand revenue and repurpose existing infrastructure to support high-performance computing.”

For example, in June 2024, Core Scientific pledged 200 megawatts of hardware capacity to support CoreWeave’s AI workloads.

In August 2024, asset management firm VanEck said that if Bitcoin mining companies invest heavily in supporting AI, their total market value could collectively increase by about $37 billion.

Still, miners have faced difficulties this year, with falling cryptocurrency prices adding to pressure on companies already affected by April’s “halving,” JPMorgan said in March. Weaker demand for AI data centers could further add to the pressure.

Bitcoin miners could improve their valuations by turning to AI.

Reduced computing resources

According to Bloomberg, analysts at TD Cowen said on March 26 that Microsoft has abandoned plans to build several new data centers, which would have provided about 2 gigawatts of power supply.

Analysts said Microsoft's withdrawal decision was due to concerns about oversupply of computing power for AI models and the company's decision to abandon some planned collaborations with ChatGPT maker OpenAI.

According to Bloomberg, Microsoft has canceled leases for multiple data centers in the past six months and postponed plans to increase computing power.

Bloomberg said that Microsoft's data center investment is expected to slow further by the second half of 2025 as the company will turn to equipping existing data centers with hardware and equipment after completing the planned construction of $8 billion.