Core Scientific is set to raise $3.3 billion via a high-yield bond sale, further solidifying its shift towards AI-focused data center operations. The surge in demand for AI services has put a strain on data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets for funding. Having sold $175 million in bitcoin last month, Core Scientific, formerly a bitcoin miner, is now building six data centers to support AI workloads, with a 12-year lease agreement with CoreWeave expected to yield approximately $10 billion in revenue.
This move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. Core Scientific plans to utilize 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 AI development.
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 higher margins, as the bitcoin mining industry faced significant challenges due to rising power costs and a decline in bitcoin price. The company's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% increase this year, while bitcoin has fallen by 11%.