Core Scientific is poised to raise $3.3 billion through a high-yield bond sale, marking a significant step in its strategic shift towards artificial intelligence-driven 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 market options to fund their operations.
Having previously sold $175 million in bitcoin, Core Scientific is now building six data centers designed to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that is expected to generate around $10 billion in revenue. This development 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 plans to utilize the proceeds to repay existing debt, fund reserves, and support construction across multiple states, highlighting the capital-intensive nature of AI infrastructure development.
The company, which was founded in 2017 and grew into one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022, has undergone a significant transformation. Its pivot from bitcoin mining to AI hosting is driven by the pursuit of higher profit margins, as the bitcoin mining industry faced significant challenges due to rising power costs and a decline in bitcoin prices.
With its existing data centers and power contracts gaining new value as hosting sites for AI-powered computers, Core Scientific has caught the attention of investors and is now at the forefront of the AI push, with its shares experiencing a significant increase of nearly 42% this year.