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 put a strain on data centers, power supply, and advanced chip technology, prompting companies to explore riskier debt markets to secure funding for operational development. Core Scientific, previously a bitcoin mining entity, sold $175 million in bitcoin last month to further its AI-centric transition. According to Bloomberg, borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds so far this year.
Core Scientific is building six data centers designed to support AI workloads, with CoreWeave leasing the capacity 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 bond sale proceeds to repay existing debt, fund reserves, and support construction costs across multiple states if necessary.
The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. The shift from bitcoin mining to AI hosting is driven by the pursuit of higher profit margins. Following its emergence from reorganization in January 2024, Core Scientific has been focusing on leveraging its existing data centers and power contracts to host AI-powered computers, attracting major hyperscalers such as Microsoft and Alphabet in the process.