Core Scientific is set to raise $3.3 billion through a high-yield bond sale as it accelerates its shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip technology to their limits, prompting companies to explore riskier debt markets to secure funding for operational development. Having sold $175 million in bitcoin last month, Core Scientific, formerly a bitcoin mining entity, is now building six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that could generate around $10 billion in revenue.
This move follows a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. Core Scientific intends to utilize the proceeds to repay existing debt, fund reserves, and support construction projects across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI infrastructure development.
The company currently holds less than 1,000 bitcoin, according to its CFO, Jim Nygaard. Core Scientific's strategic pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces declining profitability due to rising power costs and increased competition. The company's existing assets, including data centers and power contracts, have found new utility in hosting AI-powered computers, attracting the attention of major hyperscalers such as Microsoft and Alphabet. As one of the first large-scale miners to pivot towards AI, Core Scientific has garnered significant investor interest, with its shares rising by approximately 6% on Tuesday and nearly 42% this year, despite a decline in bitcoin prices.