Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards artificial intelligence-driven 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 markets for funding. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a major bitcoin miner, is now building six data centers designed 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-related borrowers raising $17.9 billion in junk bonds so far this year.
Core Scientific's decision follows significant deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company plans to use 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 remaining bitcoin holdings of under 1,000, Core Scientific is firmly committed to its AI-focused pivot.
Founded in 2017, the company grew into one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022 due to high power costs and a weak bitcoin price. After emerging from reorganization in January 2024 and being relisted on Nasdaq, Core Scientific has undergone a significant transformation, driven by the pursuit of higher margins in AI hosting. The company's shares have seen a notable increase, up about 6% on Tuesday and nearly 42% this year, while bitcoin prices have fallen 11%.