In a bid to further its transition into AI-focused data center operations, Core Scientific is set to raise $3.3 billion through a high-yield bond sale. This move comes as demand for AI services continues to push the limits of data centers, power supply, and advanced chip technology, prompting firms to seek funding from riskier debt market segments to support their operational development. Having previously sold $175 million in bitcoin to propel its AI pivot, Core Scientific, formerly a prominent bitcoin miner, is now building six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that could generate around $10 billion in revenue. This development is part of a larger trend, with borrowers linked to AI infrastructure having raised $17.9 billion in junk bonds so far this year.
Core Scientific plans to utilize the bond sale proceeds to repay existing debt, fund reserves, and support construction projects across several states if costs exceed available funds, underscoring the capital-intensive nature of AI infrastructure buildout. The company, which has undergone significant transformation since its founding in 2017 and its subsequent filing for Chapter 11 in December 2022, has emerged from reorganization and is now listed on Nasdaq under the ticker CORZ. Its pivot from bitcoin mining to AI hosting is driven by the pursuit of more lucrative margins, as the bitcoin mining industry faces challenges including reduced block rewards and rising power costs.
With its existing data centers and power contracts gaining new utility in hosting AI computers, Core Scientific has attracted the attention of hyperscalers such as Microsoft and Google parent Alphabet, positioning itself as a key player in the AI race.