Core Scientific is set to raise $3.3 billion through a high-yield bond sale, further solidifying its transition to artificial intelligence-driven data center operations. The surge in demand for AI services has pushed data centers and related infrastructure to their limits, prompting companies to explore riskier debt markets to secure funding. Core Scientific, formerly a major bitcoin miner, recently sold $175 million in bitcoin to accelerate its AI-focused pivot.
According to Bloomberg, borrowers linked to AI infrastructure have raised $17.9 billion in junk bonds 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 proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds, highlighting the capital-intensive nature of AI development. The company currently holds less 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 more lucrative margins.
The company emerged from reorganization in January 2024 and has since been relisted on Nasdaq under the ticker CORZ. With the rising costs of power and competition in the mining sector, many miners have become unprofitable, prompting them to seek alternative revenue streams. The shift to AI hosting has provided a new use case for miners' existing data centers and power contracts, attracting major hyperscalers such as Microsoft and Alphabet.
Core Scientific's shares have seen a significant increase, up about 6% on Tuesday and nearly 42% this year, while bitcoin prices have fallen 11%.