Core Scientific is set to raise $3.3 billion via a high-yield bond sale, further solidifying its transition to AI-centric data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting firms to explore riskier debt markets for funding. Following the sale of $175 million in bitcoin last month, Core Scientific is now building six data centers tailored to support AI workloads, with a 12-year lease agreement with CoreWeave expected to 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. Core Scientific plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds. The company's shift towards AI hosting is driven by the pursuit of higher margins, having previously been impacted by high power costs and a decline in bitcoin price. With the average cash cost to mine one bitcoin rising and the price of BTC experiencing a downturn, miners have been forced to explore alternative revenue streams.
The pivot to AI hosting has enabled miners to leverage their existing assets, including data centers and power contracts, to attract hyperscalers such as Microsoft and Google. Core Scientific's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% gain this year, while bitcoin has fallen by 11%.