Core Scientific is set to issue $3.3 billion in high-yield bonds as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has pushed data centers and related infrastructure to their limits, prompting companies to explore alternative funding sources.
Following the sale of $175 million in bitcoin, Core Scientific is now building six AI-capable data centers, with a 12-year lease agreement with CoreWeave expected to generate 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's plans include repaying existing debt, funding reserves, and supporting construction projects across multiple states.
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 decreased block rewards.