AI's hunger for power is kicking Bitcoin miners to the curb

Paraguay's state-owned utility has been a major power supplier for Bitcoin mining, providing electricity for about 4% of the world's mining operations at the low rate of $44 per megawatt-hour. These lucrative contracts, currently bringing in around $350 million annually for Paraguay, are set to expire on December 31, 2027, and the utility has declared that date final with no extensions planned.

Instead of renewing these deals, Paraguay has just signed a 15-year agreement to power a new AI campus backed by venture capital firm Founders Fund. This shift represents a classic tech industry pattern where newer, buzzer technologies (AI) displace established ones (crypto mining) in the competition for finite resources like cheap electricity, ultimately showing that in the energy market, hype has a half-life.