Core Scientific is set to raise $3.3 billion through a high-yield bond sale, furthering its shift towards AI-focused data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting companies to seek funding from riskier debt market segments to support their operations. Core Scientific, formerly a bitcoin miner, recently sold $175 million in bitcoin to accelerate its AI transition. Borrowers associated with AI infrastructure have raised $17.9 billion in junk bonds this year, according to Bloomberg.
Core Scientific is building six data centers to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could generate around $10 billion in revenue. The company's move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion. Core Scientific plans to use the proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds. The company still 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. The company was founded in 2017 and grew into one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022.
It emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ. The shift from bitcoin mining to AI hosting is a strategic move to capitalize on the growing demand for AI services and the valuable assets miners possess, including already-built data centers and power contracts.