Core Scientific is poised to raise $3.3 billion via a high-yield bond sale, further solidifying its strategic shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip capabilities to their limits, prompting companies to explore riskier debt market avenues for funding. Following the sale of $175 million in 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 leasing agreement with CoreWeave that could yield 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 intends to utilize the proceeds to repay existing debt, fund reserves, and support construction projects across multiple states, highlighting the capital-intensive nature of AI development. The company currently holds fewer than 1,000 bitcoin units.
The pivot from bitcoin mining to AI hosting is driven by margin considerations, as the bitcoin mining industry faced significant challenges due to rising power costs and a decline in bitcoin prices. 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 by 11%.