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-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 market avenues to secure funding for operational development. Core Scientific, having previously divested $175 million in bitcoin, is furthering its AI-centric pivot.
According to Bloomberg, borrowers associated with AI infrastructure have raised a substantial $17.9 billion in high-yield bonds this year. Core Scientific is currently developing six data centers designed to support AI workloads, with a 12-year lease agreement with CoreWeave that is expected to generate around $10 billion in revenue.
This move is part of a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. Another company, Edged Compute, is marketing $1.3 billion in bonds to fund facilities leased to CoreWeave and an Alibaba unit.
Core Scientific intends to utilize the bond sale proceeds to repay existing debt and replenish its funds. Additionally, the company plans to support construction projects across multiple states if costs exceed available funds, underscoring the capital-intensive nature of AI infrastructure development.
The company currently holds less than 1,000 bitcoins, as stated by CFO Jim Nygaard. The transition from bitcoin mining to AI hosting is largely driven by profit margins. Founded in 2017, Core Scientific grew into one of North America's largest bitcoin miners before filing for Chapter 11 bankruptcy in December 2022, due to high power costs and a decline in bitcoin prices. The company emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ.
The shift from bitcoin mining to AI hosting is primarily driven by the pursuit of higher margins. The April 2024 halving event reduced block rewards, and by late 2025, the average cash cost to mine one bitcoin increased, while the price of BTC itself declined. As a result, most miners became unprofitable and were forced to explore alternative revenue streams.
The emergence of AI presented a new opportunity for miners, as their existing data centers and power contracts could be repurposed for hosting AI computers. The power contracts, grid connections, and cooling-ready sites are now attracting major players, including Microsoft and Google, in the ongoing AI race.
Core Scientific was among the first miners to pivot on a large scale, capturing investors' attention and fueling the AI push. Core Scientific's shares experienced a 6% increase on Tuesday and are up nearly 42% this year, while bitcoin prices fell by 11%.