Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has led to increased pressure on data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to secure funding for their operations. Core Scientific, formerly a bitcoin mining company, recently sold $175 million in bitcoin to further its AI-focused transition. According to Bloomberg, borrowers linked to AI infrastructure have raised $17.9 billion in high-yield bonds so far this year.
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 bond sale proceeds to repay existing debt, fund reserves, and support construction costs across several states if necessary.
This move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion. Core Scientific'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 a weak 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 prices have fallen by 11%.