Russia’s push for AI expansion threatens to undermine crypto mining

Russia is now offering preferential treatment for data centers involved in AI development, including reduced electricity rates, state funding, and tax breaks.

New legislation prioritizing the use of computing power for artificial intelligence applications may limit available resources for crypto mining. It comes as a growing number of miners globally shift toward AI in pursuit of greater predictability and profits.

Russia puts out bill designed to regulate AI

Russia’s Ministry of Digital Development, Communications and Mass Media has released a draft law designed to regulate artificial intelligence (AI) in the country.

The document, which was published Wednesday for public consultations until mid-April, aims to establish clear rules for AI developers and businesses in the coming months.

It also seeks to limit risks associated with the new technology by introducing specific requirements for AI systems that will depend “on the degree of their impact on human life and society.”

With the new legislation, set to enter into force by September next year, Russia is betting on artificial intelligence, as reported by the Interfax news agency and the business news portal RBC.

The bill defines it as “a set of technologies that can simulate human cognitive functions, including self-learning, and produce results comparable to or superior to human ones.”

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It classifies AI models into three categories based on their origin and level of trust – sovereign, national and trusted – as detailed in a previous report by Cryptopolitan.

The legal framework determines the rights and obligations of all parties involved in the development and use of such solutions and services.

It also protects Russian citizens from hidden manipulation and discriminatory algorithms, while blocking illegal content and unauthorized use, the digital ministry noted in a statement.

“All audiovisual materials created using AI must contain a special warning label,” the announcement unveiled, adding that social networks will be obliged to check for its presence, label or remove content.

AI gets preferential treatment over crypto mining

The authors of the draft law have paid particular attention to ensuring the availability of computing infrastructure necessary to underpin the development of AI in Russia.

The government in Moscow will approve a list of data processing centers (DPCs) designated for the needs of artificial intelligence and these will enjoy certain benefits.

The operators of such facilities will be able to enter into long-term agreements for the purchase of electricity at capped rates, lower than the tariffs for other industrial consumers.

They will also be connected to the power distribution network with priority and will be exempt from connection fees.

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The companies running the AI data centers will be granted access to funding from the state budget and offered various tax breaks.

All these privileges put the artificial intelligence sector ahead of the crypto mining industry as both compete for the same computing capacities.

Russia, a major player in the mining space, legalized the minting of digital currencies like Bitcoin in late 2024 but then started restricting the energy-intensive activity in regions experiencing electricity shortages.

Another indication that AI will be prioritized over mining came in the summer of 2025, when media reports revealed that Russian authorities were preparing to ban mining in DPCs.

The main motive highlighted at the time was to deny crypto miners the opportunity to claim benefits intended to boost the country’s AI potential, including access to cheap, often subsidized electric power.

Russia’s latest push to promote the development of artificial intelligence comes as an increasing number of mining enterprises around the world transition to data processing for AI applications.

The shift is often dictated by expectations for higher returns on investments in hardware as well as improved business predictability in comparison with Bitcoin mining.

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