Core Scientific is set to raise $3.3 billion via a high-yield bond sale as part of its strategic shift towards AI-driven data center operations. The surge in demand for AI services has led to a significant strain on data centers, power supply, and advanced chip capabilities, prompting companies to explore riskier debt market segments for funding. Following its sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that could yield 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 plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds, underscoring the capital-intensive nature of AI development. The company currently holds less than 1,000 bitcoin, according to its CFO. This strategic pivot towards AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces significant challenges due to rising power costs and a decline in bitcoin prices.
The company's shares have seen a notable increase, up about 6% on Tuesday and nearly 42% this year, while bitcoin has fallen 11%.