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 pushed data centers and advanced chip technology to their limits, prompting firms to explore riskier debt markets to secure funding for their operations.
Having sold $175 million in bitcoin last month, Core Scientific, formerly a bitcoin miner, is now building six data centers designed 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 decision follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion.
The company plans to use 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 improving margins. The company, which was founded in 2017 and emerged from reorganization in January 2024, still holds less than 1,000 bitcoin.
Its shift towards AI hosting is driven by the potential for higher margins, as the bitcoin mining industry faces challenges such as rising 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 has fallen 11%.