Core Scientific is set to raise $3.3 billion via 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 led to a shortage of data center capacity, power supply, and advanced chips, prompting companies to explore riskier debt markets to secure funding for their operations.
Having sold $175 million in bitcoin last month, Core Scientific, formerly a major bitcoin miner, is now focusing on its AI pivot. According to Bloomberg, borrowers linked to AI infrastructure have raised $17.9 billion in junk bonds so far this year. Core Scientific's six data centers, designed to support AI workloads, have been 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-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 proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds, highlighting the capital-intensive nature of AI infrastructure development.
The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. Core Scientific's transition from bitcoin mining to AI hosting is driven by the pursuit of higher margins.
Following its emergence from reorganization in January 2024 and relisting on Nasdaq under the ticker CORZ, the company has been focusing on leveraging its existing assets, including data centers and power contracts, to host AI-powered computers. This strategic shift has attracted the attention of hyperscalers such as Microsoft and Google parent Alphabet, and has sparked a significant AI push.
As a result, Core Scientific's shares have seen a significant increase, rising by about 6% on Tuesday and nearly 42% this year, while bitcoin prices have declined by 11%.