Core Scientific is set to raise $3.3 billion through a high-yield bond sale, marking a significant step in its strategic shift towards artificial intelligence-focused data center operations. The surge in demand for AI services has led to a strain on data centers, power supply, and advanced chips, prompting firms to explore riskier debt market options to fund their operations. Core Scientific, formerly a major bitcoin miner, recently sold $175 million in bitcoin to further its AI-focused pivot.
According to Bloomberg, borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds this year. Core Scientific is developing six data centers to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that is expected to generate around $10 billion in revenue. This move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion.
Core Scientific plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds, highlighting the capital-intensive nature of the AI buildout. The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard.
Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins. The company's shares have seen a significant increase, with a 6% rise on Tuesday and a nearly 42% increase this year, while bitcoin has fallen 11%.