Core Scientific is set to raise $3.3 billion through a high-yield bond sale, marking a significant step in its strategic shift towards artificial intelligence-driven data center operations. The surge in demand for AI services has led to increased pressure on data centers, power supply, and advanced chips, prompting companies to explore alternative debt markets to fund their operations. Following its sale of $175 million in bitcoin last month, Core Scientific is now building six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that is expected to generate around $10 billion in revenue.
This move is part of a larger trend, with AI infrastructure-related borrowers securing $17.9 billion in high-yield bonds so far this year. Core Scientific's plans include repaying existing debt, funding reserves, and supporting construction projects across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI development. The company currently holds fewer than 1,000 bitcoins, according to its CFO, Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher profit margins.
The company's transition began after filing for Chapter 11 in December 2022 and emerging from reorganization in January 2024. With the bitcoin halving in April 2024 and rising power costs, miners faced significant challenges, leading to a shift towards hosting AI-powered computers. This strategic move has attracted the attention of major hyperscalers, including Microsoft and Alphabet, and has sparked a significant AI-driven push.
Core Scientific's shares have seen a notable increase, rising by approximately 6% on Tuesday and nearly 42% this year, while bitcoin prices have declined by 11%.