Core Scientific is set to raise $3.3 billion through a high-yield bond sale, marking a significant step in its transition to AI-focused data center operations. The surge in demand for AI services has pushed the limits of data centers, power supply, and advanced chips, prompting firms to explore riskier debt markets for funding. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a major bitcoin miner, is now building six data centers 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 borrowers linked to AI infrastructure raising $17.9 billion in junk bonds so far this year.
Core Scientific plans to use the proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds, highlighting the capital-intensive nature of AI development. The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces rising power costs and intense competition. The company's shares have seen a significant increase, with a 6% rise on Tuesday and a nearly 42% increase this year, while bitcoin prices have fallen by 11%.