Core Scientific is set to raise $3.3 billion through a high-yield bond sale, as part of its strategic shift towards AI-focused data center operations. The surge in demand for AI services has led to a shortage of data centers, power supply, and advanced chips, prompting companies to explore riskier debt markets to fund their operations.
Core Scientific, formerly a bitcoin mining company, recently sold $175 million in bitcoin to accelerate its AI pivot. According to Bloomberg, borrowers linked to AI infrastructure have raised $17.9 billion in junk bonds this year. Core Scientific is building six data centers to support AI workloads, with a 12-year lease agreement with CoreWeave that could generate around $10 billion in revenue. This move follows a series of large deals, including recent offerings tied to Google-backed data centers and CoreWeave, which raised a combined $6.7 billion.
Core Scientific plans to use the proceeds to repay existing debt, fund reserves, and support construction across several states if costs exceed available funds. The company still holds less than 1,000 bitcoin, 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 declining profitability due to rising power costs and competition. The company's shares have risen by about 6% and are up nearly 42% this year, while bitcoin has fallen 11%.