- Core Scientific announces a $3.5 billion deal with AI cloud provider CoreWeave for high-performance computing infrastructure.
- The contract will utilize 18% of Core Scientific’s total operating infrastructure to support CoreWeave’s operations.
- This move aims to diversify Core Scientific’s revenue amidst challenges from the recent Bitcoin halving.
Core Scientific, a leading Bitcoin mining company in the United States, is turning to artificial intelligence (AI) to navigate the recent challenges posed by Bitcoin’s latest halving event. The firm has secured a $3.5 billion deal with AI cloud provider CoreWeave to support its high-performance computing (HPC) needs.
Announced on June 3, Core Scientific will allocate an additional 200 megawatts (MW) of infrastructure to host CoreWeave’s HPC operations. This substantial commitment represents 18% of Core Scientific’s total operating infrastructure, underscoring the significance of the deal. The contract is expected to generate cumulative revenue exceeding $3.5 billion over its initial 12-year term, translating to an estimated annual revenue of approximately $290 million.
Previous Collaborations and Future Plans
This latest agreement builds on a previous multi-year contract from March 2024, where Core Scientific provided up to 16 MW of data center infrastructure to CoreWeave. Founded in 2017 by Michael Intrator, Brian Venturo, and Brannin McBee, CoreWeave has rapidly expanded its footprint in the AI cloud sector. In May 2024, CoreWeave secured a $7.5 billion debt facility from Blackstone, Magnetar, and Coatue, valuing the company at $19 billion.
Core Scientific’s shift towards AI cloud infrastructure comes in response to the fourth Bitcoin halving on April 20, 2024, which cut miner rewards from 6.25 BTC to 3.125 BTC per block. With Bitcoin prices not showing a significant post-halving surge, mining companies like Core Scientific are exploring alternative revenue streams to sustain their operations.
Strategic Diversification
Core Scientific CEO Adam Sullivan emphasized the strategic benefits of the partnership with CoreWeave. “Our expanding relationship with CoreWeave creates a pathway for Core Scientific to diversify our business model and balance our portfolio between Bitcoin mining and alternative compute hosting, positioning us to maximize cash flow and minimize risk while maintaining our significant exposure to Bitcoin’s upside potential,” he stated.
