Core Scientific is poised to raise $3.3 billion via a high-yield bond sale, furthering its strategic shift towards artificial intelligence-driven data center operations. The surge in demand for AI services has led to increased strain on data centers, power supplies, and advanced chip technology, prompting companies to explore riskier debt markets to secure necessary funds.
Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin mining entity, is now constructing six data centers tailored to support AI workloads, with the leased capacity to CoreWeave under a 12-year agreement expected to generate around $10 billion in revenue. This move is part of a larger trend, with borrowers associated with AI infrastructure raising $17.9 billion in junk bonds so far this year.
Core Scientific's decision follows a series of significant deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to utilize the bond sale 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.
As of now, Core Scientific retains fewer than 1,000 bitcoins, according to its CFO, Jim Nygaard. The company's pivot from bitcoin mining to AI hosting is primarily driven by profit margins. After emerging from reorganization in January 2024 and relisting on Nasdaq under the ticker CORZ, Core Scientific has been focusing on leveraging its existing assets, including data centers and power contracts, to host AI-powered computers, attracting the attention of major hyperscalers such as Microsoft and Alphabet.