Core Scientific is set to raise $3.3 billion through a high-yield bond sale, further solidifying its shift towards AI-focused 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 market segments to secure funding for operational development. Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a bitcoin miner, is now building six data centers to support AI workloads, with a 12-year leasing agreement with CoreWeave 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. Core Scientific’s decision follows significant deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion.
The company intends to utilize the proceeds to repay existing debt, fund reserves, and support construction across several 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 enhancing 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 nearly 42% increase this year, amidst a decline in bitcoin prices.