In a bid to accelerate its shift towards AI-centric data center operations, Core Scientific is set to raise $3.3 billion through a high-yield bond sale. The move comes as demand for AI services continues to push data centers, power supply, and advanced chips to their limits, prompting firms to explore riskier debt markets to fund their operations. Following the sale of $175 million in bitcoin last month, Core Scientific, formerly a major bitcoin miner, is now building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement expected to generate around $10 billion in revenue.
This development is part of a larger trend, with borrowers linked to AI infrastructure raising $17.9 billion in junk bonds so far this year. Core Scientific's decision follows a series of large 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 several states if costs exceed available funds, highlighting the capital-intensive nature of AI buildout. With the company still holding less than 1,000 bitcoin, according to CFO Jim Nygaard, the pivot from bitcoin mining to AI hosting is largely driven by margin considerations.
The decline in bitcoin prices and rising power costs have rendered most mining operations unprofitable, prompting miners to seek alternative revenue streams. The value of their existing data centers and power contracts has been rediscovered in hosting AI-powered computers, attracting the attention of hyperscalers like Microsoft, Google parent Alphabet, and others. As one of the first large-scale miners to pivot towards AI, Core Scientific has garnered investor attention, with its shares rising approximately 6% on Tuesday and nearly 42% this year, even as bitcoin prices fell 11%.