Core Scientific is set to raise $3.3 billion through a high-yield bond sale as it accelerates its shift towards AI-focused 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 markets for funding. Core Scientific, a former bitcoin miner, recently sold $175 million in bitcoin to further its AI transition.
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 proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds. Core Scientific still holds less than 1,000 bitcoin.
The company's pivot from bitcoin mining to AI hosting is driven by margin considerations, as the bitcoin mining industry faced significant challenges due to high power costs and a weak bitcoin price. The shift towards AI hosting has enabled miners to utilize their existing data centers and power contracts, attracting hyperscalers such as Microsoft and Google parent Alphabet.
Core Scientific's shares have risen by about 6% and are up nearly 42% this year, while bitcoin has fallen 11%.