Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has pushed the limits of data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to secure funding for their operations.
Having previously sold $175 million in bitcoin to support its AI transition, Core Scientific, formerly a major bitcoin miner, is now building six data centers to support AI workloads. These centers have been leased to CoreWeave under a 12-year agreement, which is expected to 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 collectively raised $6.7 billion.
Core Scientific plans to utilize the bond sale proceeds to repay existing debt, fund reserves, and support construction costs across multiple states if necessary. The company's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher profit margins, as the bitcoin mining industry faces significant challenges due to rising power costs and intense competition.