Core Scientific is set to raise $3.3 billion through a high-yield bond sale as part of its strategic shift towards AI-driven 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 markets to secure funding for operational development. Core Scientific, formerly a bitcoin mining company, recently sold $175 million in bitcoin to further its AI-focused transition.
Borrowers associated with AI infrastructure have raised $17.9 billion in high-yield bonds so far this year, according to Bloomberg. Core Scientific is developing six data centers to support AI workloads, with the capacity leased to CoreWeave under a 12-year agreement that could generate around $10 billion in revenue. The company's 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 currently 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.
The company was founded in 2017 and grew into one of North America's largest bitcoin miners before filing for Chapter 11 in December 2022. It emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ. The shift from bitcoin mining to AI hosting is centered on profitability, as the average cash cost to mine one bitcoin increased while the price of BTC declined. Core Scientific was one of the first miners to pivot on a large scale, attracting investors' attention and sparking the AI push.
The company's shares have risen by about 6% and are up nearly 42% this year, while bitcoin has fallen by 11%.