Core Scientific is set to raise $3.3 billion through a high-yield bond sale, furthering its strategic shift towards AI-focused data center operations. The surge in demand for AI services has led to unprecedented strain on data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to secure funds for expansion.
Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a major bitcoin miner, is now building six AI data centers with a 12-year lease agreement to CoreWeave, potentially generating $10 billion in revenue. This move is part of a larger trend, with AI infrastructure borrowers raising $17.9 billion in junk bonds this year. Core Scientific will utilize the bond proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, underscoring the capital-intensive nature of AI development. The company's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces challenges due to rising power costs and decreasing profitability.