A United States regulator’s decision to block an Amazon AI data center from pulling a portion of power from its adjacent Pennsylvania power plant could tighten an already competitive market for power — including for Bitcoin miners. 

The United States Federal Energy Regulatory Commission (FERC) on Nov. 1 rejected a request that would allow Talen Energy’s Susquehanna nuclear plant in Pennsylvania to divert some of its electricity output to Amazon’s data center, according to Bloomberg.

The deal had garnered interest over the ability of the largest data center developers to quickly tap into abundant power without waiting years for new power plants to get built.

However, the FERC ruling creates a barrier to this quick supply route increasingly demanded to power data centers as AI rapidly evolves.

While this particular deal was rejected, it was seen as a temporary setback by Constellation Energy, one of America’s largest energy producers. Additionally, FERC Chairman Willie Phillips recognizes AI as a “generational” opportunity for national security.

Talen Energy’s Susquehanna power plant. Source: Talen Energy

Meta had also planned to build an AI data center next to an already operating nuclear power plant. However, regulatory and environmental hurdles resulted in those plans being axed this week.  

Tech giants like Amazon and Microsoft have been making major power procurement moves as the competition for energy intensifies. Bitcoin mining also demands a significant amount of power. 

Potential impact on Bitcoin miners 

Bitcoin mining expert Jaran Mellerud told Cointelegraph that AI facilities are on an “aggressive hunt” across the US and other developed nations, “devouring massive amounts of power in prime locations with ample fiber and infrastructure.”

“With the ability to generate much higher revenues per kilowatt-hour, these AI operations can easily outbid Bitcoin miners for electricity — and they are doing exactly that,” he added.

“Over the next five years, the US Bitcoin mining industry faces a dire threat of displacement by these AI facilities. As AI’s appetite for power grows, Bitcoin miners will be pushed to the fringes, forced to chase down power in areas lacking the infrastructure AI demands.

He predicted that by 2030, “the US share of the global hashrate will plummet from the current 40% to below 20%, while mining activity shifts to remote regions inaccessible to AI,” primarily in developing countries.

Additionally, the energy required to run AI systems may already be higher than the amount of power used to mine Bitcoin, according to the Bitcoin Policy Institute.

Tech giants and AI firms can afford to outbid miners for the same electricity as AI offers up to 25 times more revenue than Bitcoin per kilowatt hour (kWh), the research noted. 

Additionally, some miners are already adding AI processing to their data centers or even switching entirely from Bitcoin to AI. “We will see this trend so long as the revenue per megawatt-hour is higher for AI than Bitcoin,” BPI researcher Margot Paez told Cointelegraph in August. 

The surge in generative AI usage this year will result in AI using 169 TWh in 2024, estimated the researchers. This growth will continue to outpace Bitcoin mining, using an estimated 240 TWh in 2027 compared to an estimated 160 TWh for mining. 

However, it is not that easy for Bitcoin miners to pivot to more profitable AI. Crypto assets adviser Anibal Garrido told Cointelegraph that this was because miners use application-specific integrated circuit (ASIC) machinery designed solely to calculate the hashes of the proof-of-work protocol, which can’t be repurposed for AI or data mining. 

Magazine: AI may already use more power than Bitcoin — and it threatens Bitcoin mining