Core Scientific is set to raise $3.3 billion through a high-yield bond sale as it accelerates its shift towards AI-focused 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 market options to fund their operations. Core Scientific, formerly a bitcoin mining company, sold $175 million in bitcoin last month to further its AI transition.
Borrowers associated with AI infrastructure have raised $17.9 billion in junk bonds this year, according to Bloomberg. Core Scientific is building six data centers to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could generate around $10 billion in revenue.
The company plans to use the proceeds to repay existing debt, fund reserves, and support construction across several states. Core Scientific's move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion.
The company's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces challenges due to high power costs and a weak bitcoin price. With the rising demand for AI services, miners' existing data centers and power contracts have gained a new use case: hosting computers that power AI.