Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, marking a significant step in its strategic shift towards artificial intelligence-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 markets to secure funding for their operations. Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement anticipated to generate around $10 billion in revenue.
This move is part of a larger trend, with borrowers linked to AI infrastructure raising $17.9 billion in high-yield bonds so far this year. Core Scientific's decision follows a series of substantial deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion.
The company plans 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 the AI buildout. With its pivot from bitcoin mining to AI hosting, Core Scientific is focusing on improving margins, having emerged from reorganization in January 2024 and been relisted on Nasdaq under the ticker CORZ. The company's shares have seen a significant increase, with a 6% rise on Tuesday and a nearly 42% increase this year, while bitcoin has fallen 11%.