Core Scientific ( CORZ ) is preparing to raise $3.3 billion through a junk bond sale as it continues its transition toward artificial intelligence-focused data center operations.
Demand for AI services has pushed data centers, power supplies and advanced chips to their limits. To keep up, companies are tapping riskier parts of the debt market for funds to continue developing their operations. One-time bitcoin miner Core Scientific sold $175 million in bitcoin last month to advance its AI pivot.
Borrowers tied to AI infrastructure have raised $17.9 billion in junk bonds so far this year, Bloomberg reported. CORZ itself is building six data centers that will support AI workloads, with the capacity leased to CoreWeave under a 12-year deal that could bring in about $10 billion in revenue, the report added, citing sources familiar with the deal.
Core Scientific’s move follows a number of major agreements. Recent offerings tied to Google-backed data centers and CoreWeave raised a combined $6.7 billion. Another company, Edged Compute, is marketing $1.3 billion in bonds to finance facilities leased to CoreWeave and an Alibaba unit.
Core Scientific said it will use the proceeds to repay existing debt and fund reserves. It also plans to support construction across multiple states if costs exceed available funds, signaling how capital-intensive AI deployment has become.
The company still has “under 1,000 bitcoin,” according to CFO Jim Nygaard.
Big AI pivot
Core Scientific was founded in 2017 and grew into one of North America’s largest bitcoin miners before filing for Chapter 11 in December 2022, pressured by high power costs and a weak bitcoin price. It emerged after reorganization in January 2024 and was relisted on the Nasdaq under the ticker CORZ.
The pivot from bitcoin mining to AI hosting is all about the margins.
The April 2024 halving reduced block rewards from 6.25 BTC to 3.125, and by the end of 2025 the average cash cost to mine a bitcoin, while the price of BTC itself had been in decline, had risen from over $125,000 to around $75,800. With rising power costs and competition, most miners became unprofitable and had to find alternative ways to continue making money.
That’s when AI came to the rescue. The miners’ most valuable assets, already built data centers and power contracts, meanwhile, found a new use case: hosting computers that power AI.
Their power contracts, grid connections and chill-ready websites are attracting hyperscalers, including Microsoft, Google parent Alphabet and others, in the ongoing AI race. Core Scientific was one of the first miners to pivot at scale, catching the attention of investors and sparking the AI push.
Core Scientific shares rose about 6% Tuesday and are up nearly 42% this year, while bitcoin fell 11%.
