Core Scientific lines up $3.3B junk-bond sale as it doubles down on AI data centers
Core Scientific (CORZ) is preparing to sell roughly $3.3 billion in high-yield (junk) bonds as it accelerates its transformation from bitcoin miner to operator of AI-focused data centers. The move underscores how companies with power-hungry infrastructure are tapping riskier corners of the debt market to bankroll costly AI buildouts.
Why the debt push matters
Surging demand for AI compute is straining data centers, power supplies and advanced chips, forcing operators to pursue large-scale financing. So far this year, borrowers connected to AI infrastructure have raised about $17.9 billion in junk bonds, according to Bloomberg. Core Scientific’s planned offering follows a flurry of big deals tied to AI hosting, including a combined $6.7 billion in recent offerings linked to Google-backed facilities and CoreWeave, and a $1.3 billion marketing effort by Edged Compute to fund sites leased to CoreWeave and an Alibaba unit.
The Core Scientific plan
Core Scientific is building six AI-ready data centers whose capacity will be leased to CoreWeave under a 12-year agreement that sources say could generate roughly $10 billion in revenue over the term. The company said proceeds from the bond sale would be used to repay existing debt, bolster reserves and, if necessary, cover construction cost overruns across multiple states — highlighting how capital-intensive the AI infrastructure race has become.
Company finances and pivot history
Last month Core Scientific sold $175 million in bitcoin as part of funding its AI pivot; CFO Jim Nygaard said the company still holds “under 1,000 bitcoin.” Founded in 2017, Core Scientific grew into one of North America’s largest bitcoin miners but filed for Chapter 11 in December 2022 amid high power costs and a weak bitcoin price. It emerged from reorganization in January 2024 and returned to Nasdaq as CORZ.
Why miners are pivoting to AI
The strategic shift reflects margin pressure in mining: April 2024’s halving cut block rewards from 6.25 BTC to 3.125 BTC, while average cash costs to mine one bitcoin rose and BTC’s price declined (the article notes a fall from over $125,000 to around $75,800). With higher power costs and tougher competition, many miners became unprofitable and repurposed their built-out data centers, power contracts and grid connections to host AI compute. Those assets — cooling-ready sites and long-term power capacity — are now in demand from hyperscalers, including Microsoft and Alphabet, turning miners’ legacy infrastructure into a new revenue stream.
Market reaction
Investors have taken note: Core Scientific shares rose about 6% on Tuesday and are up nearly 42% year-to-date, while bitcoin was down about 11% over the same period.
Bottom line
Core Scientific’s $3.3 billion junk-bond push is emblematic of a broader trend: firms with large, power-connected sites are refinancing and reinventing themselves to capture the fast-growing, capital-intensive AI compute market — even if it means leaning on riskier financing to do so.
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