Core Scientific is set to issue $3.3 billion in high-yield bonds to accelerate its strategic shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and cutting-edge chips to their limits, prompting firms to seek funding from riskier debt markets to support their growth. Core Scientific, formerly a major bitcoin miner, has sold $175 million in bitcoin to further its AI-focused pivot. According to Bloomberg, borrowers linked to AI infrastructure have secured $17.9 billion in junk bonds so far this year.
Core Scientific is developing six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could yield around $10 billion in revenue. This move follows a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion. Core Scientific plans to utilize the bond proceeds to repay existing debt, fund reserves, and support construction projects across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI infrastructure development.
The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. Core Scientific's transformation from a bitcoin mining company to an AI hosting provider is driven by the pursuit of higher margins. The company's pivot has been successful, with its shares rising by about 6% on Tuesday and nearly 42% this year, while bitcoin prices have fallen by 11%.