Core Scientific is set to raise $3.3 billion through a high-yield bond sale, further solidifying its shift towards artificial intelligence-driven 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 market segments for funding. Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a bitcoin miner, is now building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement estimated to generate around $10 billion in revenue. This move is part of a larger trend, with AI infrastructure-related borrowers raising $17.9 billion in junk bonds so far this year.
Core Scientific’s decision follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI development. Core Scientific currently holds fewer than 1,000 bitcoins, according to CFO Jim Nygaard. 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 such as high power costs and decreased block rewards.
With its existing data centers and power contracts gaining new value as hosting sites for AI computers, Core Scientific has caught the attention of investors and hyperscalers like Microsoft and Google, sparking a significant AI-focused push.