Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, further solidifying its strategic shift towards AI-focused data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip technologies to their limits, prompting companies to explore riskier debt market segments for funding. Core Scientific, formerly a prominent bitcoin miner, recently sold $175 million in bitcoin to accelerate its AI transition. According to Bloomberg, borrowers associated with AI infrastructure have secured $17.9 billion in high-yield bonds so far this year.
Core Scientific is developing six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could generate around $10 billion in revenue. This move follows a series of substantial 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, replenish funds, and support construction across multiple states if costs exceed available funds, underscoring the capital-intensive nature of AI infrastructure development. The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard.
Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins. The company, founded in 2017, emerged as one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022 due to high power costs and a weak bitcoin price. After reorganization, it was relisted on Nasdaq under the ticker CORZ in January 2024. The transition from bitcoin mining to AI hosting is centered on enhancing profitability.
The April 2024 halving reduced block rewards, and by late 2025, the average cash cost to mine one bitcoin increased, while the price of BTC declined. Rising power costs and competition rendered most miners unprofitable, prompting them to seek alternative revenue streams.
The emergence of AI presented a new opportunity, as existing data centers and power contracts could be repurposed for hosting AI-powered computers. Core Scientific was among the first miners to pivot on a large scale, capturing investors' attention and fueling the AI-driven momentum. The company's shares have risen by approximately 6% and are up nearly 42% this year, while bitcoin has fallen by 11%.