Core Scientific is poised to raise $3.3 billion via a high-yield bond sale as part of its strategic shift towards artificial intelligence-driven data center operations. The surge in demand for AI services has put a strain on data centers, power supply, and advanced chip capabilities, prompting companies to explore riskier debt market avenues to secure funding for operational development.
Having previously sold $175 million in bitcoin, Core Scientific, formerly a bitcoin mining entity, is now building six data centers designed to support AI workloads, with a 12-year leasing agreement with CoreWeave that could generate around $10 billion in revenue. This move follows a series of large-scale deals, including recent bond offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion.
Core Scientific intends to utilize the bond sale proceeds to repay existing debt, replenish funds, and support construction projects across multiple states, highlighting the capital-intensive nature of AI infrastructure development. The company currently holds fewer than 1,000 bitcoins, according to its CFO, Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is primarily driven by margin considerations, as the company seeks to capitalize on the growing demand for AI services and leverage its existing assets, including data centers and power contracts, to attract major hyperscalers and drive revenue growth.