As part of its strategic shift towards artificial intelligence-driven data center operations, Core Scientific is set to raise $3.3 billion through a high-yield bond sale. The move is driven by surging demand for AI services, which has pushed data centers, power supply, and advanced chip capabilities to their limits. To stay ahead, companies are now tapping into riskier segments of the debt market to secure funding for operational development.
Core Scientific, previously a major bitcoin miner, recently sold $175 million worth of bitcoin to further its AI-focused transition. According to a report by Bloomberg, borrowers associated with AI infrastructure have collectively raised $17.9 billion in high-yield bonds so far this year. Core Scientific is currently building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could yield around $10 billion in revenue.
This development follows a series of large-scale deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. Another firm, Edged Compute, is currently marketing $1.3 billion in bonds to fund facilities leased to CoreWeave and an Alibaba unit. Core Scientific plans 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 infrastructure development. The company currently holds less than 1,000 bitcoin, as stated by CFO Jim Nygaard.
This significant pivot towards AI is driven by the pursuit of higher margins, following the company's emergence from reorganization in January 2024. The transition from bitcoin mining to AI hosting is largely driven by the changing economics of the bitcoin market, which has become increasingly challenging due to rising power costs and intense competition.
With the advent of AI, miners' existing assets, such as data centers and power contracts, have found new utility in hosting AI-powered computers, attracting major hyperscalers like Microsoft and Alphabet. Core Scientific's shares have seen a notable increase, rising by about 6% on Tuesday and nearly 42% this year, while bitcoin prices have declined by 11%.