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 pushed the limits of data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to fund their operations. Core Scientific, formerly a major bitcoin miner, recently sold $175 million in bitcoin to further its AI-focused transition.
According to Bloomberg, borrowers linked to AI infrastructure have raised $17.9 billion in junk bonds this year. Core Scientific is building six data centers to support AI workloads, with a 12-year lease agreement with CoreWeave that could generate around $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 multiple states if costs exceed available funds.
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. It emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ. The shift from bitcoin mining to AI hosting has been a strategic response to changing market conditions, with miners' existing data centers and power contracts gaining new value as hosting sites for AI computers.
This trend has attracted the attention of hyperscalers, including Microsoft and Google parent Alphabet, and has sparked a significant AI-focused push in the industry.