Core Scientific is set to raise $3.3 billion through a high-yield bond sale, furthering its strategic shift towards AI-centric data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chip technology to their limits, 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 building six AI-dedicated data centers, with the capacity leased to CoreWeave under a 12-year agreement 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 intends to utilize the proceeds to repay existing debt, fund reserves, and support construction projects across multiple states if costs exceed available funds, highlighting the capital-intensive nature of AI infrastructure development. The company currently holds fewer than 1,000 bitcoins, according to CFO Jim Nygaard. Core Scientific's pivot from bitcoin mining to AI hosting is driven by the pursuit of higher margins, as the bitcoin mining industry faces significant challenges due to rising power costs and a decline in bitcoin prices.
The company's shares have seen a significant increase, with a 6% rise on Tuesday and a 42% increase this year, while bitcoin prices have fallen by 11%.