Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, marking a significant step in its strategic shift towards artificial intelligence-driven 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 secure funding for their operations. Having recently sold $175 million in bitcoin, 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 generate around $10 billion in revenue.
This move follows a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. Core Scientific plans to utilize the bond sale proceeds to repay existing debt, replenish its reserves, and support construction projects across multiple states, underscoring the capital-intensive nature of its AI expansion. The company currently holds less than 1,000 bitcoins, according to its CFO, Jim Nygaard.
Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces challenges such as rising power costs and decreasing block rewards. The company's shares have seen a significant increase, with a 6% rise on Tuesday and a nearly 42% gain this year, while bitcoin prices have declined by 11%.