Core Scientific is poised to secure $3.3 billion in funding through a high-yield bond sale, further solidifying its strategic shift towards AI-driven data center operations. The surge in demand for AI services has pushed the limits of data centers, power supply, and advanced chip technology, prompting companies to explore riskier debt markets to support their growth. Following the sale of $175 million in bitcoin last month, Core Scientific is now building six data centers designed to support AI workloads, with CoreWeave leasing the capacity under a 12-year agreement that could generate around $10 billion in revenue. This move is part of a larger trend, with AI infrastructure borrowers raising $17.9 billion in junk bonds so far this year, according to Bloomberg.
Core Scientific's decision follows a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to utilize the 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 development. With its pivot from bitcoin mining to AI hosting, Core Scientific is focusing on improving margins, having emerged from reorganization in January 2024 and relisted on Nasdaq under the ticker CORZ.
The company's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% growth this year, amidst a decline in bitcoin prices.