Core Scientific is set to raise $3.3 billion through a high-yield bond sale as it accelerates 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 firms to explore riskier debt markets for funding. Core Scientific, formerly a bitcoin miner, sold $175 million in bitcoin last month to further its AI transition. Borrowers linked to 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 plans to use 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. Core Scientific still holds less than 1,000 bitcoin, according to CFO Jim Nygaard. The company's pivot from bitcoin mining to AI hosting is driven by margin considerations.
After emerging from reorganization in January 2024, Core Scientific was relisted on Nasdaq under the ticker CORZ. The shift from bitcoin mining to AI hosting has become a strategic move for many miners, as their existing assets, such as data centers and power contracts, have gained new value in hosting AI computers. This has attracted the attention of hyperscalers like Microsoft, Google parent Alphabet, and others, driving the AI push.
Core Scientific's shares have risen about 6% and are up nearly 42% this year, while bitcoin has fallen 11%.