Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, further solidifying its shift towards artificial intelligence-centric data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting companies to explore riskier debt market options to sustain their operations.
Having previously sold $175 million in bitcoin, Core Scientific is now building six data centers to support AI workloads, with a 12-year lease agreement with CoreWeave that is expected to generate around $10 billion in revenue. This move follows a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion.
Core Scientific plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, underscoring the capital-intensive nature of AI development. The company currently holds fewer than 1,000 bitcoin, according to CFO Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry has faced significant challenges due to rising power costs and a decline in bitcoin prices. The company's shares have seen a notable increase, with a 6% rise on Tuesday and a 42% increase this year, while bitcoin has fallen by 11%.