Core Scientific is set to raise $3.3 billion through a high-yield bond sale, marking a significant step in 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 chips, prompting companies to explore riskier debt markets to secure funding for their operations.

Core Scientific, formerly a major bitcoin miner, recently sold $175 million in bitcoin to accelerate its transition to AI. According to Bloomberg, borrowers involved in AI infrastructure have raised $17.9 billion in junk bonds this year alone.

Core Scientific is building six data centers to support AI workloads, with a 12-year lease agreement with CoreWeave that could generate approximately $10 billion in revenue. This move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion.

Core Scientific 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. The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins. The company was founded in 2017 and grew into one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022 due to high power costs and a weak bitcoin price.

It emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ. The transition from bitcoin mining to AI hosting is centered around maximizing profitability. The April 2024 halving reduced block rewards, and by late 2025, the average cash cost to mine one bitcoin increased, while the price of BTC itself declined.

As a result, most miners became unprofitable and had to explore alternative revenue streams. The rise of AI presented a new opportunity for miners, as their existing data centers and power contracts could be repurposed for hosting AI-powered computers. Core Scientific was one of the first miners to make a large-scale pivot, attracting investor attention and fueling the AI push.

The company's shares have risen by about 6% and are up nearly 42% this year, while bitcoin has fallen by 11%.