Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, further solidifying its shift towards artificial intelligence-focused data center operations. The surge in demand for AI services has pushed data centers, power supply, and advanced chips to their limits, prompting firms to explore riskier debt market segments for funding.
Having sold $175 million in bitcoin last month, Core Scientific, formerly a bitcoin miner, is now building six data centers to support AI workloads, with a 12-year lease agreement to CoreWeave that could yield around $10 billion in revenue. This development follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which collectively raised $6.7 billion.
Core Scientific 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 infrastructure development. The company currently holds less than 1,000 bitcoin, according to its 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 faced significant challenges due to high power costs and a weak bitcoin price.
The company's shares have seen a notable increase, with a 6% rise on Tuesday and a nearly 42% increase this year, while bitcoin has fallen by 11%.