Core Scientific is set to raise $3.3 billion through a high-yield bond sale, further solidifying 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 prominent bitcoin miner, recently sold $175 million in bitcoin to accelerate its AI-focused pivot.
According to Bloomberg, borrowers associated with AI infrastructure have raised a total of $17.9 billion in high-yield bonds so far this year. Core Scientific is currently building six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that is expected to generate 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 collectively raised $6.7 billion.
Core Scientific intends to utilize the proceeds to repay existing debt, replenish reserves, and support construction projects across multiple states if costs exceed available funds, highlighting the capital-intensive nature of the AI expansion. The company currently holds fewer than 1,000 bitcoin, according to CFO Jim Nygaard.
Core Scientific's strategic shift from bitcoin mining to AI hosting is driven by the pursuit of higher margins. Following its emergence from reorganization in January 2024 and subsequent relisting on Nasdaq under the ticker CORZ, the company has been focused on leveraging its existing data centers and power contracts to host AI-powered computers.
This strategic pivot has attracted the attention of hyperscalers, including Microsoft and Alphabet, and has sparked a significant AI-driven push. As a result, Core Scientific's shares have experienced a notable increase, rising by approximately 6% on Tuesday and nearly 42% this year, while the price of bitcoin has declined by 11%.