Core Scientific is poised to raise $3.3 billion through a high-yield bond sale as it accelerates its shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting firms to explore riskier debt market segments to secure funding for operational development. Core Scientific, formerly a bitcoin mining entity, sold $175 million in bitcoin last month to further its AI-focused transition.
Borrowers associated with AI infrastructure have raised $17.9 billion in junk bonds this year, according to Bloomberg. Core Scientific is building six data centers to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could generate around $10 billion in revenue. The company's 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 buildout. The company still holds less than 1,000 bitcoin, according to CFO Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by margin considerations, as the company seeks to leverage its existing data centers and power contracts to attract hyperscalers, including Microsoft and Google parent Alphabet, in the ongoing AI race.