Core Scientific is gearing up to raise $3.3 billion through a high-yield bond sale, marking a significant step in its strategic shift towards AI-driven data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip technology to their limits, prompting companies to explore riskier debt markets to secure funding for their operations. Having sold $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, 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 plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, underscoring the capital-intensive nature of the AI buildout. 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, as the bitcoin mining industry faces significant challenges, including rising power costs and a weak bitcoin price. The company's shares have seen a notable increase, with a 6% rise on Tuesday and a 42% increase this year, while bitcoin has fallen 11%.