Core Scientific is raising $3.3 billion through a junk bond sale to fund its ongoing transition toward artificial intelligence-focused data center operations.
The company is building six AI data centers, leased to CoreWeave for 12 years, and is expected to generate approximately $10 billion in revenue.
Demand for AI services is pushing data centers to their limits, prompting firms to tap riskier debt markets for development funds. Core Scientific, formerly a bitcoin miner, sold $175 million in bitcoin last month to accelerate its AI pivot.
Borrowers linked to AI infrastructure have raised $17.9 billion in junk bonds this year. Core Scientific's six AI data centers, leased to CoreWeave under a 12-year agreement, could generate around $10 billion in revenue.
Proceeds from the bond sale will be used to repay existing debt and fund reserves. The company also plans to support construction across several states if costs exceed available funds.
Core Scientific previously filed for Chapter 11 bankruptcy in December 2022 due to high power costs and a weak bitcoin price. It emerged from reorganization in January 2024 and was relisted on Nasdaq under the ticker CORZ.
The pivot from bitcoin mining to AI hosting is driven by improved profit margins. Rising power costs and competition made traditional mining unprofitable, leading miners to repurpose their data centers and power contracts for AI workloads.
Core Scientific's shares have risen approximately 6% on Tuesday and are up nearly 42% this year.