Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has put a strain on data centers, power supply, and advanced chip technology, prompting companies to explore riskier debt markets to fund their operations. Core Scientific, formerly a bitcoin mining company, recently sold $175 million in bitcoin to further its AI transition. According to Bloomberg, borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds so far this year.
Core Scientific is building six data centers 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 deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion. Core Scientific plans to use the bond proceeds to repay existing debt, fund reserves, and support construction costs across several states.
The company currently holds less than 1,000 bitcoin, according to its CFO. The pivot from bitcoin mining to AI hosting is driven by profit margins. After emerging from reorganization in January 2024, Core Scientific has been focusing on its AI expansion, leveraging its existing data centers and power contracts to attract hyperscalers like Microsoft and Google.
The company's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% gain this year, while bitcoin prices have fallen 11%.