Core Scientific is set 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 led to increased pressure on data centers, power supply, and advanced chip technology, prompting companies to explore riskier debt markets to secure funding for their operations. Core Scientific, formerly a major bitcoin mining entity, recently sold $175 million in bitcoin to further its AI-focused expansion. According to Bloomberg, borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds this year alone.

Core Scientific is developing six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that is expected to generate around $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 currently 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 more lucrative margins.

The company's transition began after filing for Chapter 11 in December 2022, due to high power costs and a decline in bitcoin price, and has since emerged from reorganization and been relisted on Nasdaq under the ticker CORZ. The shift from bitcoin mining to AI hosting has provided miners with a new revenue stream, leveraging their existing data centers and power contracts to host AI-powered computers. This strategic move has attracted the attention of hyperscalers, including Microsoft and Google parent Alphabet, and has sparked a significant AI-focused push.

Core Scientific's shares have risen by approximately 6% and are up nearly 42% this year, while bitcoin has fallen by 11%.