Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting companies to explore riskier debt market options to fund their operations. Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a major bitcoin miner, is now building six data centers to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement expected to generate around $10 billion in revenue.
This move is part of a larger trend, with AI infrastructure borrowers raising $17.9 billion in junk bonds so far this year. Core Scientific’s bond sale follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion.
The company plans to use the proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds. With its pivot from bitcoin mining to AI hosting, Core Scientific is focusing on improving margins.
The company, which was founded in 2017 and grew into one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022, has emerged from reorganization and is now relisted on Nasdaq. The shift towards AI hosting is driven by the potential for higher margins, as the bitcoin mining industry faces challenges due to high power costs and a weak bitcoin price. With its existing data centers and power contracts, Core Scientific is well-positioned to attract hyperscalers, including Microsoft and Google parent Alphabet, in the ongoing AI race.