Core Scientific is set to raise $3.3 billion through a high-yield bond sale as it accelerates its shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip technology to their limits, prompting companies to explore riskier debt markets to fund their operational development.
Core Scientific, formerly a bitcoin mining entity, recently sold $175 million in bitcoin to further its AI-focused pivot. Borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds so far this year, according to Bloomberg.
Core Scientific is building six data centers that will 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 utilize the bond sale proceeds to repay existing debt and fund reserves, as well as support construction across several states if costs exceed available funds. This move underscores the capital-intensive nature of the AI buildout.
Core Scientific still holds less than 1,000 bitcoin, according to CFO Jim Nygaard. The company's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins.
Following its emergence from reorganization in January 2024, Core Scientific has been focusing on hosting computers that power AI, leveraging its existing data centers and power contracts to attract hyperscalers such as Microsoft and Google parent Alphabet.