In a bid to further its transition into AI-focused data center operations, Core Scientific is set to raise $3.3 billion through a high-yield bond sale. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting companies to explore riskier debt market segments for funding. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six AI-dedicated data centers, with a 12-year lease agreement with CoreWeave that could 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 decision follows significant deals, including Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to utilize the bond sale proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI infrastructure development.
With less than 1,000 bitcoins remaining in its holdings, Core Scientific is prioritizing its AI-focused pivot, driven by the pursuit of more lucrative margins. The company's transition from bitcoin mining to AI hosting is a strategic response to the evolving market landscape, where miners' existing assets, such as data centers and power contracts, have found new utility in supporting AI operations.