Core Scientific is poised 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 led to increased strain on data centers, power supply, and advanced chip capabilities, prompting firms to explore riskier debt market avenues to secure necessary funds. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement anticipated to generate around $10 billion in revenue. This development 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 move is preceded by several large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company intends to utilize the bond sale proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, underscoring the capital-intensive nature of AI development.
With its pivot from bitcoin mining to AI hosting, Core Scientific is focusing on enhancing profit margins, driven by the changing landscape of bitcoin mining and the growing demand for AI services.