Core Scientific (CORZ) is preparing to raise $3.3 billion through a junk bond issuance as it continues its transformation into an artificial intelligence-focused data center business.
Demand for AI services has pushed data centers, power supplies and advanced chips to their limits. To keep up, businesses are tapping riskier parts of the debt market to secure funding to continue growing their businesses. Core Scientific, a former Bitcoin miner, sold $175 million in Bitcoin last month to further advance its artificial intelligence business.
Borrowers tied to artificial intelligence infrastructure have raised $17.9 billion in junk bonds so far this year, according to Bloomberg. CORZ itself is building six data centers to support artificial intelligence workloads, leasing capacity to CoreWeave under a 12-year agreement that could bring in about $10 billion in revenue, the report said, citing sources familiar with the deal.
Core Scientific’s move follows a series of large deals. Products related to Google-backed data centers and CoreWeave have recently raised a combined $6.7 billion. Another company, Edged Compute, is issuing $1.3 billion in bonds to fund facilities leased to CoreWeave and Alibaba subsidiaries.
Core Scientific said it will use the proceeds to repay existing debt and fund reserves. It also plans to support construction in multiple states if costs exceed available funds, a sign of how capital-intensive AI construction has become.
Chief Financial Officer Jim Nygaard said the company still holds “less than 1,000 Bitcoins.”
Big artificial intelligence fulcrum
Founded in 2017, Core Scientific grew to become one of the largest Bitcoin miners in North America before filing for Chapter 11 in December 2022, but has been squeezed by high electricity costs and weak Bitcoin prices. The company completed its restructuring in January 2024 and relisted on Nasdaq under the stock code CORZ.
The key from Bitcoin mining to AI hosting is profit.
The April 2024 halving slashed the block reward from 6.25 BTC to 3.125, and by the end of 2025, the average cash cost of mining one Bitcoin rose, while the price of BTC itself has been declining, from over $125,000 to around $75,800. As electricity costs rise and competition intensifies, most miners become unprofitable and have to find alternative ways to continue earning revenue.
That’s when artificial intelligence comes to the rescue. At the same time, miners’ most valuable assets, established data centers and power contracts, gained a new use case: hosting the computers that power artificial intelligence.
Their power contracts, grid connections and cooling-ready sites are luring hyperscalers, including Microsoft, Google parent Alphabet and others, into the ongoing artificial intelligence race. Core Scientific was one of the first miners to make a massive transformation that caught the attention of investors and sparked a push for artificial intelligence.
Core Scientific shares rose about 6% on Tuesday and are up nearly 42% this year, while Bitcoin has fallen 11%.
