Core Scientific is set to raise $3.3 billion through a high-yield bond sale, furthering its strategic shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip technology to their limits, prompting firms to explore riskier debt market channels for funding. 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 expected to generate around $10 billion in revenue. This move 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 decision follows a series of significant deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to utilize the bond sale proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, highlighting the capital-intensive nature of the AI buildout. Core Scientific currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. The company's pivot from bitcoin mining to AI hosting is largely driven by profit margins.
After emerging from reorganization in January 2024 and being relisted on Nasdaq under the ticker CORZ, Core Scientific has been focusing on the AI sector, leveraging its existing data centers and power contracts to attract hyperscalers such as Microsoft and Google parent Alphabet.