Core Scientific (CORZ) is preparing to raise $3.3 billion through a junk bond sale as it continues its transition into AI-focused data center operations.
The demand for AI services has pushed data centers, power supply and advanced chips to their limits. To keep up, companies are turning to riskier parts of the debt market for funds to continue developing their operations. Core Scientific, once a bitcoin miner, sold $175 million in bitcoin last month to promote its pivot into AI.
Borrowers linked 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, and the capacity will be leased to CoreWeave under a 12-year deal that could generate around $10 billion in revenue, the report added, citing sources familiar with the deal.
Core Scientific’s move follows a series of big deals. Recent offerings tied to data centers backed by Google and CoreWeave collectively raised $6.7 billion. Another company, Edged Compute, is marketing $1.3 billion in bonds to finance facilities leased to CoreWeave and a unit of Alibaba.
Core Scientific said it will use the proceeds to pay down existing debt and fund reserves. It also plans to support construction in several states if costs exceed available funds, indicating how capital intensive AI development has become.
The company still has “less than 1,000 bitcoins,” according to CFO Jim Nygaard.
Big AI Pivot
Core Scientific was founded in 2017 and grew to become one of the largest bitcoin miners in North America before filing for Chapter 11 in December 2022, pressured by high energy costs and a weak bitcoin price. It emerged from a reorganization in January 2024 and relisted on Nasdaq under the symbol CORZ.
The pivot from bitcoin mining to AI hosting is all about margins.
The April 2024 halving reduced block rewards from 6.25 BTC to 3.125, and in late 2025, the average cash cost to mine a bitcoin increased while the price of BTC itself had been falling, from over $125,000 to around $75,800. With rising energy costs and competition, most miners became unprofitable and had to find alternative ways to continue earning income.
That’s when AI came to the rescue. Meanwhile, miners’ most valuable assets, already built data centers and power contracts, got a new use case: hosting computers that power AI.
Its power contracts, grid connections and cool-ready sites 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 on a large scale, which caught the attention of investors and sparked the AI push.
Core Scientific shares rose about 6% on Tuesday and nearly 42% this year, while bitcoin fell 11%.
