Core Scientific is set to raise $3.3 billion through a high-yield bond sale, advancing its strategic shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting firms to explore riskier debt market segments for funding to sustain operational development. Having sold $175 million in bitcoin last month, Core Scientific, formerly a bitcoin miner, is now building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could yield 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 collectively raised $6.7 billion. Core Scientific intends to utilize 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 infrastructure 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 higher margins, as the bitcoin mining industry faced significant challenges due to high power costs and a weak bitcoin price.
The company's shares have seen a notable increase, with a 6% rise on Tuesday and a nearly 42% increase this year, while bitcoin has fallen 11%.