Core Scientific is set to raise $3.3 billion through a high-yield bond sale, marking a significant step in its transition to AI-centric data center operations. The surge in demand for AI services has led to increased pressure on data centers, power supply, and advanced chip technology, prompting companies to explore alternative debt markets to fund their operations.
Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a major 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 large 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 several states. With the AI buildout becoming increasingly capital-intensive, Core Scientific's pivot from bitcoin mining to AI hosting is driven by the potential for higher margins.
The company's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% increase this year, while bitcoin prices have fallen 11%.