NVIDIA CEO sounds the alarm on computing power: AI demand may trigger a memory crisis, what’s next for Bitcoin miners?

At the 2026 International Consumer Electronics Show, NVIDIA CEO Jensen Huang issued a clear warning, pointing out that AI computing demand is experiencing an “exponential surge.” This demand, combined with a historic memory shortage, has caused RAM prices to skyrocket by over 200 in the short term, triggering supply chain shocks across the global tech industry.

The first to be affected is the cryptocurrency mining industry, where miners face unprecedented cost pressures and survival challenges as they compete for the same hardware resources as financially powerful AI giants. Meanwhile, the Bitcoin mining sector itself is undergoing a profound green transformation and business model reshaping—shifting from mere energy consumers to energy integrators and actively transitioning into AI computing service providers to seek survival and growth amid the upheaval.

AI Demand Sparks Historic Memory Crisis: The “Hashrate War” Among Miners Escalates

On January 5, 2026, at CES in Las Vegas, Jensen Huang depicted a picture of explosive demand for computing power to the global tech community. He clearly stated that the parameters required for AI models are increasing at a rate of tenfold annually, leading to a “sharp rise in computational needs.” This is not an empty forecast but a realistic and urgent judgment. As early as October 2025, Huang told CNBC that as AI models evolved from simple Q&A to complex reasoning, computational demands had “significantly increased” over the past six months. This demand directly translates into an insatiable appetite for GPUs, with NVIDIA’s latest single-GPU systems consuming up to 1,400 watts and requiring complex liquid cooling systems.

Huang described the “two exponential phenomena”—the rapid advancement of AI capabilities and the explosive growth in processing capacity needs—are reshaping the priorities of the global semiconductor industry. To meet the insatiable demand for high-bandwidth memory from AI accelerators, memory manufacturers have shifted large portions of capacity from consumer-grade DRAM to HBM. Industry analysis shows that producing 1 GB of HBM consumes roughly three times the wafer capacity of DDR5 memory. It is forecasted that by 2026, AI workloads will account for nearly 20% of global DRAM supply. This structural capacity shift is at the root of the current memory crisis.

The crisis quickly manifests in prices, with increases being unprecedented in scale and scope. Kingston Data Center SSD Business Manager Cameron Crandell reported that compared to Q1 2025, NAND wafer prices surged by an astonishing 246%, with 70% of that increase occurring within just 60 days. Consumer DDR5 memory prices have doubled, with products previously costing a few hundred dollars now priced in the four-digit range. Tech giant Micron announced in early 2026 that it would exit the consumer Crucial brand to prioritize “larger strategic customers in faster-growing sectors.” This move leaves Samsung and SK Hynix as the main suppliers of consumer DDR4/DDR5 DRAM. Industry experts warn that prices will continue to rise throughout 2026, and new wafer capacity will not come online until at least 2027. For hardware-dependent and profit-sensitive crypto miners, this is undoubtedly a harsh winter. They not only face revenue pressures from Bitcoin halving reducing block rewards but also now must compete head-to-head with tech giants like Google, Amazon, Microsoft, and Meta, which are placing “unlimited orders” for hardware.

Miners’ Survival: From “Power-Hungry Beasts” to “Green Energy Hubs” and “AI Compute Landlords”

In the face of dual pressures from hardware shortages and electricity costs, Bitcoin miners worldwide have not sat idly but have charted two clear paths for survival and evolution: one is to deeply embrace green energy and waste heat recovery to completely transform their energy image; the other is to leverage their existing energy and infrastructure advantages to pivot decisively toward AI compute hosting and services.

In green transformation, Chinese miner giant Canaan recently launched a pilot project in Manitoba, Canada, providing an inspiring model for the industry. The project deployed 360 liquid-cooled Avalon miners, with core innovation in capturing waste heat via a closed-loop heat exchange system to preheat water for partner Bitforest’s tomato greenhouses. Canaan estimates that about 90% of the server’s electrical energy can be converted into heat, with output water temperatures exceeding 75°C and an overall electricity cost of just $0.035 per kWh. This not only saves significant direct heating costs for the greenhouses during harsh Canadian winters but also explores a new “mining-heat supply-agriculture” collaborative business model, demonstrating that high-density computing infrastructure can serve as a practical heat source in cold climates. This aligns with recent data from Cambridge University: renewable energy sources (hydropower, solar, wind) and nuclear power now supply over 52% of the Bitcoin network’s power, with natural gas replacing coal as the primary energy source, and coal usage dropping from 36.6% three years ago to 8.9%.

However, a more disruptive strategic shift is occurring at the business level—moving from “coin mining” to “rental compute power.” Facing long-term GPU lock-in by AI companies, leading Bitcoin miners have keenly realized that their greatest assets are not just mining rigs but large-scale, approved power infrastructure and data center operational experience. Bernstein analysts note that North American Bitcoin miners collectively control over 14 GW of power resources, making them ideal partners for tech giants facing power shortages and lengthy data center approval cycles.

Rapidly emerging are examples of this transformation. In November 2025, IREN Limited signed a $9.7 billion AI compute supply contract with Microsoft, causing its stock to soar 25% that day. Cipher Mining also reached a $3 billion deal with Google-backed Fluidstack and received a 5.4% equity injection from Google. Additionally, companies like TeraWulf, Hut 8, and Core Scientific have announced similar plans to shift toward AI hosting services. JPMorgan’s analysis sets a clear timeframe: about nine months for Bitcoin miners to sign contracts with US large-scale cloud providers and AI startups. The report also highlights high entry barriers: equipping a 100 MW site with advanced GPUs may require around $3 billion, compared to $700,000 to $1 million per MW for building a Bitcoin mine. Data centers designed for high redundancy and reliability for AI workloads could cost up to $20 million per MW.

Industry Crossroads: Obsolescence, Transformation, and Revaluation

The convergence of AI demand and memory shortages is fundamentally reshaping the computing resource industry. This is not merely cyclical volatility but a structural shift that could permanently alter the allocation of global silicon wafer capacity. For decades, producing DRAM and NAND for smartphones and PCs was the industry’s priority. Now, that momentum has reversed, with AI infrastructure becoming the main driver of semiconductor investment and capacity allocation. For crypto miners, the choices are stark: persist with increasingly squeezed profit margins, invest heavily in transforming into AI infrastructure providers, or exit the industry altogether.

This pressure is reflected in network data. Despite Bitcoin’s recent hash rate peak at 1.032 ZHash/s, miners’ profitability is plummeting. JPMorgan reports that Bitcoin’s hash rate declined for the second consecutive month in December 2025, while the average daily block reward per Exahash dropped 32% year-over-year, hitting a new low. The April 2024 halving reduced block rewards from 6.25 to 3.125 BTC, already cutting miners’ core revenue, and the surge in hardware costs makes things worse.

Market segmentation has begun. Miners with cheap, stable green power, advantageous locations, and strong ties to tech giants are gaining “ticket to transformation.” They can leverage their power contracts and infrastructure to become key AI compute providers, gaining more stable and predictable cash flows than Bitcoin mining. For example, Canaan’s waste heat recovery project not only demonstrates environmental value but also exemplifies the evolution of miners from “energy consumption endpoints” to “energy value conversion hubs.”

However, for small and medium miners lacking capital, resources, and strategic foresight, prospects are bleak. They cannot compete for scarce hardware in price wars nor afford the massive capital expenditure needed to pivot to AI data centers. Under dual pressures, industry consolidation and exit seem inevitable. The next 18 months will be critical in determining the fate of many mining operations.

Dual Insights for Investors and Industry: Seeking New Alpha in the Computing Power Revolution

This AI-driven surge in computing power and memory shortages, along with the dramatic evolution of the crypto mining industry, offers multiple lessons for market participants and observers.

First, it reaffirms the core value of “hard assets” and “infrastructure” in technological revolutions. Whether it’s NVIDIA’s GPUs, SK Hynix’s HBM, or the gigawatt-scale power resources controlled by miners, these are the physical foundations supporting the digital world. When application-layer demand (AI) explodes, the value of these underlying resources will be the first to be re-evaluated. Investors should focus on companies with technological barriers or resource monopolies in critical parts of the compute supply chain.

Second, the investment logic of the crypto industry, especially the mining sector, is undergoing profound change. The traditional “hashrate-price” correlation model is outdated. Now, evaluating a miner requires a comprehensive view of energy cost structures, energy conversion innovations (like waste heat utilization), data center transformation capacity, and integration with mainstream tech ecosystems. Pure “mining stocks” may face valuation pressure, while those successfully transforming into “green energy compute service providers” could enjoy higher valuation premiums.

For the broader crypto market, the health of the mining industry—its backbone—is crucial. Large-scale miner failures or excessive centralization among a few successful giants could raise concerns about network security and decentralization. On the positive side, miners’ shift toward green energy and integration with the real economy (e.g., heat supply) continues to improve Bitcoin’s environmental narrative, potentially opening the door for more traditional financial institutions and ESG investors to allocate to Bitcoin.

Looking ahead, memory prices are likely to remain tight through 2026, with relief only expected from new wafer capacity from Micron, Samsung, and others, which will take time to ramp up. This means hardware costs will stay high in the near term. The crypto mining industry will continue to evolve amid “elimination” and “transformation.” Ultimately, survival will favor those who first recognize that “computing power” is a service and successfully integrate it with cutting-edge real economy needs—whether AI or agriculture. This crisis is less an end than a brutal but necessary industry rite of passage, pushing the entire sector from coarse resource consumption toward refined value creation.