30s Summary

The US Federal Energy Regulatory Commission denied Talen Energy’s request to divert energy from its nuclear plant for an Amazon data center. This intensifies power competition in the market between tech companies and Bitcoin miners. Recently, tech companies have been struggling to secure quick power supplies, further impeding AI advancements. Bitcoin miners are also at risk as AI facilities generate higher revenues per kilowatt-hour. The Bitcoin Policy Institute suggested that AI energy usage will surpass Bitcoin mining and reach 169 TWh in 2024, further threatening Bitcoin miners’ share in the worldwide hash rate.

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The US Federal Energy Regulatory Commission recently declined a request that would have allowed Talen Energy’s nuclear plant in Pennsylvania to divert some of its electricity to power an Amazon data center. This has added to the tough competition for power in the market, which also includes Bitcoin miners.

Previously, big data center developers had the ability to tap into a large amount of power without having to wait for new power plants to be built. However, this latest decision has put up a roadblock for getting power quickly, which is becoming increasingly important as AI continues to advance at a rapid pace.

Even though this particular request was turned down, Constellation Energy, one of the USA’s leading energy producers, views this as a temporary setback. FERC Chairman Willie Phillips even describes AI as a key opportunity for national security.

Interestingly, Meta also had plans to construct an AI data center near an existing nuclear power plant. But, they had to abandon this idea due to regulatory and environmental hurdles. As competition for energy grows, Amazon and Microsoft, and other tech giants have been making huge moves to secure power.

Bitcoin miners are also feeling the squeeze. AI facilities across the US and other developed nations are aggressively seeking vast amounts of power. Because they generate higher revenues per kilowatt-hour, these facilities can out-compete Bitcoin miners for power—and that’s exactly what they’re doing.

In fact, within the next five years, the US Bitcoin mining industry faces the threat of being replaced by AI facilities. And if their need for power continues to increase, Bitcoin miners will be pushed to the outskirts, forced to chase down power in areas without the necessary infrastructure. If this comes to pass, the US’s share of the worldwide hash rate (a measure of computing power) could drop from 40% to less than 20% by 2030.

Furthermore, the Bitcoin Policy Institute suggests that the power needed to run AI systems could be more than what’s used to mine Bitcoin. While AI generates up to 25 times more revenue per kilowatt hour than Bitcoin, the increasing use of AI this year is predicted to result in an energy usage increase to 169 TWh in 2024, a number that will continue to grow. Despite the higher returns from AI, it’s not easy for Bitcoin miners to switch to the more profitable AI as their equipment is specific to Bitcoin mining and cannot be repurposed easily.