Core Scientific is set to raise $3.3 billion through a high-yield bond sale, furthering 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 market segments for funding. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a bitcoin mining entity, is now building six data centers to support AI workloads, with a 12-year lease agreement with CoreWeave 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.
Recent large-scale deals, including those tied to Google-backed data centers and CoreWeave, have raised a combined $6.7 billion. Core Scientific intends to utilize 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. The company currently holds fewer than 1,000 bitcoins.
Founded in 2017, Core Scientific evolved 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 under the ticker CORZ, the company has shifted its focus from bitcoin mining to AI hosting in pursuit of more lucrative margins. The April 2024 halving and subsequent rise in power costs rendered most miners unprofitable, prompting them to seek alternative revenue streams.
The pivot towards AI has enabled miners to repurpose their existing data centers and power contracts, attracting hyperscalers such as Microsoft and Google parent Alphabet. As one of the first large-scale miners to make this transition, Core Scientific has garnered investor attention and spurred the AI push. The company's shares have risen by approximately 6% and are up nearly 42% this year, while bitcoin has fallen by 11%.