Core Scientific is set to raise $3.3 billion through a high-yield bond sale as it accelerates its shift towards AI-driven data center operations. The surge in demand for AI services has led to a significant strain on data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to secure funding for their operations. Core Scientific, formerly a major bitcoin miner, recently sold $175 million in bitcoin to further its AI-focused transition.
According to Bloomberg, borrowers linked to AI infrastructure have raised $17.9 billion in high-yield bonds so far this year. Core Scientific is building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could generate around $10 billion in revenue. This move follows a series of large 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 proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds. The company still holds fewer 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. The company emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ.
The shift towards AI is attracting significant attention, with miners' existing data centers and power contracts gaining new value as they are repurposed for hosting AI-powered computers.