Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, further solidifying its strategic shift towards artificial intelligence-driven data center operations. The surge in demand for AI services has led to unprecedented strain on data centers, power supply, and advanced chip technology, prompting firms to explore riskier debt markets to secure necessary funding. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a prominent bitcoin miner, is now building six data centers tailored to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement anticipated to generate around $10 billion in revenue. This move is part of a larger trend, with borrowers linked to AI infrastructure securing $17.9 billion in high-yield bonds so far this year.
Core Scientific’s decision follows a series of substantial deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion. The company 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 development. With its pivot from bitcoin mining to AI hosting, Core Scientific is focusing on optimizing margins, having emerged from reorganization in January 2024 and relisted on Nasdaq under the ticker CORZ. The company’s strategic shift is driven by the changing landscape of bitcoin mining, which has become increasingly unprofitable due to rising power costs and competition.
In response, miners are repurposing their existing assets, including data centers and power contracts, to host AI-powered computers, attracting major hyperscalers such as Microsoft and Google parent Alphabet.