Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, as it continues to transition its operations to focus on artificial intelligence-driven data center services. The surge in demand for AI solutions has pushed data centers, power supply, and advanced chip technologies to their limits, prompting companies to explore riskier debt markets to secure funding for their operations. Having previously sold $175 million in bitcoin to further its AI pivot, Core Scientific is now 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-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, fund reserves, and support construction activities across multiple states if costs exceed available funds, underscoring the capital-intensive nature of the AI buildout. The company currently holds fewer than 1,000 bitcoin, according to its CFO, Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces challenges such as high power costs and a weak bitcoin price.
The company's shares have seen a significant increase, with a 6% rise on Tuesday and a nearly 42% increase this year, while bitcoin prices have fallen by 11%.