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 put a strain on data centers, power supply, and advanced chip capabilities, prompting companies to explore riskier debt markets to secure funding for operational development.
Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six AI data centers with a total 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-related borrowers having raised $17.9 billion in junk bonds so far this year. Core Scientific's decision follows a series of substantial deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI development.
With its pivot from bitcoin mining to AI hosting, Core Scientific is focusing on enhancing margins, having emerged from reorganization in January 2024 and been relisted on Nasdaq under the ticker CORZ. The company's shares have seen a significant increase, with a 6% rise on Tuesday and a nearly 42% increase this year, amidst a decline in bitcoin prices.