In a bid to accelerate its shift towards artificial intelligence-focused data center operations, Core Scientific is set to raise $3.3 billion through a high-yield bond sale. The surge in demand for AI services has led to a strain on data centers, power supply, and advanced chips, prompting companies to explore riskier debt market options to fund their operations.
Following the sale of $175 million worth of bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that is expected to generate around $10 billion in revenue. This move is part of a larger trend, with AI infrastructure-related borrowers raising $17.9 billion in junk bonds so far this year.
Core Scientific's bond sale 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 proceeds to repay existing debt, fund reserves, and support construction projects across multiple states, highlighting the capital-intensive nature of AI buildout.
With the pivot from bitcoin mining to AI hosting driven by margin considerations, Core Scientific's shares have seen a significant increase, rising by approximately 6% on Tuesday and nearly 42% this year.