There is a bidding war for cheap electricity in the US right now, and bitcoin miners are not winning it. The other bidder is artificial intelligence. AI data centers earn far more per kilowatt-hour than a mining rig does, so when a utility has power to sell or a grid has capacity to allocate, AI gets first call. For anyone who mines or hosts miners, this is not an abstract trend. It shows up in your power bill and in whether you can renew a cheap rate at all.
The numbers behind the squeeze
US wholesale electricity is getting more expensive, and the government's own forecaster says why. In its late-2025 outlook, the EIA put average US wholesale power around $47/MWh in 2025, up about 23% from 2024, rising again toward $51/MWh in 2026. The demand doing the pushing is concentrated: the region covering Texas, Oklahoma, Louisiana, and Arkansas is set to account for roughly two-thirds of all US electricity-sales growth in 2026, and the EIA names data centers and cryptocurrency mining as the cause.
Texas shows the scale plainly. Large-load interconnection requests on the state grid hit about 226 GW in 2025, roughly four times the prior year, and around 73% of that came from AI data centers rather than miners. When AI can pay more for the same megawatt, miners get outbid, and cheap power that used to be available to a mining operation quietly stops being available.
Why AI wins the bid
The reason is simple: AI monetizes electricity at a much higher rate. A rack of AI accelerators running inference or training produces far more revenue per kilowatt-hour than a bitcoin miner turning the same power into hashes. So a utility choosing who to connect, or a landlord deciding who to lease to, has an easy financial answer. Some public miners have read the same math and started converting sites to AI hosting themselves, which pulls even more cheap-power capacity out of mining.
None of this breaks bitcoin mining. It just raises the floor on what it takes to mine profitably. Electricity is more than 80% of a miner's day-to-day operating cost, so when the price of power rises across the grid, the margin on an unhedged machine gets thin fast.
Where the hashrate is going
You can see the pressure in the map of global mining. The US is still the largest mining country, at roughly 38% of network hashrate in Hashrate Index's Q4 2025 estimate, but its share has been slipping while places with cheaper or more available power gain ground. Russia sat around 15% and China around 14% in the same estimate. Treat these as estimates, not precise counts, because miners mask their location through pools and VPNs and no one measures this perfectly. The direction is what matters: capital and machines move toward wherever power is cheap and secure, and rising US grid prices push some of that activity elsewhere.
What this means for how you host
The lesson is not "leave the US." Plenty of low-cost US power still exists. The lesson is that where and how your power is priced now matters as much as the headline rate. A miner exposed to spot or wholesale prices is directly in the path of the AI demand curve, and faces the added risk that a cheap rate simply is not renewed when AI outbids for the same supply.
A fixed, all-in hosting rate changes your position. Instead of bidding against AI data centers at every renewal, you have one predictable number that covers power and everything around it. That does not make you immune to the market, but it moves the grid-price risk off your machine and onto the host that signed the long-term supply. In a market where power is the story, that structure is the point.
Fathom Labs hosts at $0.07/kWh all-in in Southeast Texas, in the same region driving national demand growth, but our clients pay that one rate rather than chasing wholesale prices themselves. There are no performance fees and no share of what you mine. If you want to see how a fixed hosting rate compares to running exposed to rising power costs, model it with our profitability calculator, and see our hosting cost guide for how an all-in rate is put together.
Frequently asked questions
Why are AI data centers raising electricity prices?
AI data centers consume enormous amounts of power and are being built quickly, which raises overall demand on the grid. The EIA's late-2025 outlook projected US wholesale power up about 23% in 2025 and another roughly 8.5% in 2026, with data-center-heavy regions like Texas driving most of the growth. Because demand is rising faster than new supply in many areas, prices go up.
How does the AI power boom affect bitcoin miners?
It raises miners' largest cost and can cut off access to cheap power. AI compute earns more revenue per kilowatt-hour than mining, so utilities and landlords favor AI when allocating scarce, low-cost electricity. Miners exposed to wholesale or spot prices see their power bills rise, and some lose cheap rates at renewal. Since electricity is over 80% of a miner's operating cost, this directly compresses margins.
Is US bitcoin mining declining?
The US is still the largest mining country, at roughly 38% of global hashrate in late-2025 estimates, but its share has been easing as power costs rise and other regions gain. These geographic figures are estimates, since miners obscure their locations, so they should be read as a trend rather than exact counts. The broader point is that mining migrates toward cheap, secure power.
How can a miner protect against rising power costs?
Lock in the price of power instead of floating with the market. A fixed, all-in hosting rate covers electricity and facility costs at one number, so rising grid prices and AI competition for supply become the host's problem rather than yours. It removes the risk of a cheap rate not being renewed. Fathom Labs offers $0.07/kWh all-in hosting with no performance fees.
Want to compare a fixed hosted rate against your current setup? Talk to us and we will run the numbers with you.