Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has pushed the limits of data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to fund their operations. Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a bitcoin mining entity, 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-related borrowers raising $17.9 billion in junk bonds so far this year.
Core Scientific's plans include repaying existing debt, funding reserves, and supporting construction projects across several states. The company's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher profit margins, as the bitcoin mining industry faces challenges due to rising power costs and a decline in bitcoin prices.
With its existing data centers and power contracts gaining new value as hosting sites for AI computers, Core Scientific is among the first to capitalize on this opportunity, attracting the attention of investors and hyperscalers like Microsoft and Google.