Bitcoin mining companies with growing AI infrastructure businesses faced steep losses on Wednesday as stronger-than-expected US inflation reignited concerns over interest rates and financing costs.
TeraWulf shares dropped 12.64%, while Core Scientific, Cipher Mining and IREN declined 12.44%, 12.35% and 12.2%, respectively. Other publicly traded mining companies, including Riot Platforms, Bitdeer Technologies, MARA and CleanSpark, also ended the session lower.
The declines came amid a broader retreat across US equities. The S&P 500 lost 1.1%, marking its steepest daily drop since July 29, while the Nasdaq Composite slid 1.9% for its largest decline since July 23. The Dow Jones Industrial Average edged down 0.1%.
AI-focused companies were among the hardest hit. Data center operator CoreWeave plunged 16%, Nebius fell 11%, and Oracle shed 9%. According to PRISM’s AI Data Center and Infrastructure Index, 21 of the 23 tracked stocks finished lower, recording an average decline of 7.46%.
Investors are increasingly concerned that persistent inflation could keep interest rates elevated, raising the cost of financing large-scale data center projects. This poses a particular challenge for companies expanding their AI computing capacity, many of which depend on substantial debt financing.
Inflation Data Raises Questions About Fed Policy
The latest selloff followed a US inflation report showing consumer prices increased 3.7% year over year in September, exceeding economists’ forecast of 3.6% and remaining well above the Federal Reserve’s 2% inflation target. Rising gasoline prices linked to the conflict in the Middle East contributed to the acceleration.
The data prompted traders to increase their expectations of an October rate hike. The implied probability of an increase briefly climbed above 50% on Wednesday before easing.
However, San Francisco Fed President Mary Daly signaled that policymakers were not under immediate pressure to tighten monetary policy. In comments to Reuters, Daly said additional rate increases would likely be necessary to bring inflation under control, but emphasized that the central bank had time to assess incoming data before making its next decision.
“I don’t feel urgent that we have to decide with a limited set of information. I think we have the time that we need,” Daly said.
For Bitcoin miners diversifying into AI infrastructure, the market reaction highlights a growing financial risk: although demand for AI computing capacity offers a potential source of revenue beyond cryptocurrency mining, expansion costs and reliance on borrowing may leave these companies particularly vulnerable to rising interest rates.
