Core Scientific is set to raise $3.3 billion through 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 pushed the limits of data centers, power supply, and advanced chip technology, prompting companies to explore riskier debt markets to fund their operations.
Core Scientific, formerly a major bitcoin miner, recently sold $175 million in bitcoin to further accelerate its AI-focused pivot. According to Bloomberg, borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds so far this year. Core Scientific is building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could 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 raised a combined $6.7 billion.
Core Scientific plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states if costs exceed available funds. The company currently holds less than 1,000 bitcoin, according to CFO Jim Nygaard. The pivot from bitcoin mining to AI hosting is driven by margin considerations, as the bitcoin mining industry faces challenges due to high power costs and a weak bitcoin price.
The company's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% increase this year, while bitcoin has fallen by 11%.