Paraguay's state utility will end cheap power contracts for bitcoin miners in 2027 and has signed a 15-year AI deal

Paraguay's state utility, the National Electricity Administration (ANDE), sells power to about 4% of the world's bitcoin mining under contracts priced at $44 a megawatt-hour. Those contracts expire on December 31, 2027. CoinDesk reported that ANDE calls the date final and has just signed a 15-year deal to power an AI campus backed by Founders Fund. Miners pay the country about $350 million a year.

AI companies are offering longer contracts. Crusoe, a former bitcoin miner that now builds AI infrastructure, is working with the Paraguayan developer Araico on a Latin American AI cloud powered by the Itaipu hydroelectric dam, with a launch planned for mid-2027. Mining firms already in the country, including Penguin Group, are shifting their Paraguayan operations toward AI computing.

The same competition is under way in the US. The Senate approved a preliminary version of the Bipartisan Affordability and Jobs Act, and OilPrice argued that it could let AI companies outmuscle traditional utilities for generation and grid access. In both countries, buyers of computing power are using long contracts and political support to secure cheap firm electricity ahead of other industrial users.

For miners, the issue is margins. Bitcoin below $70,000 and rising difficulty already squeeze their revenue. Losing $44 power at the end of 2027 would force them to move to Ethiopia, Central Asia or the Gulf, or to switch to AI hosting themselves.