Core Scientific is poised to raise $3.3 billion via a junk bond sale as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has led to a significant strain on data centers, power supply, and advanced chips, prompting companies to explore riskier debt market options to secure funding for their operations.
Core Scientific, formerly a prominent bitcoin miner, recently sold $175 million in bitcoin to further its AI-centric pivot. Borrowers associated with AI infrastructure have raised a substantial $17.9 billion in junk bonds so far this year, according to Bloomberg.
Core Scientific is currently building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could yield approximately $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 intends to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, highlighting the capital-intensive nature of the AI buildout. The company still retains a minimal bitcoin reserve of under 1,000. The strategic shift from bitcoin mining to AI hosting is primarily driven by the pursuit of more lucrative margins.
Following its emergence from reorganization in January 2024 and relisting on Nasdaq under the ticker CORZ, Core Scientific has been actively navigating the transition, leveraging its existing data centers and power contracts to attract hyperscalers such as Microsoft and Google parent Alphabet in the ongoing AI race.