Core Scientific Plans $3.3B Junk Bond Sale to Fuel AI Data Center Expansion

Core Scientific (NASDAQ: CORZ) is preparing to raise $3.3 billion through a high-yield, or junk bond, offering as it accelerates its transition from bitcoin mining to artificial intelligence (AI) data center operations. The move highlights the growing demand for AI infrastructure, which is pushing companies to secure large amounts of capital to expand computing capacity, power supply, and advanced chip deployment.

The surge in AI adoption has strained global data center resources, prompting firms like Core Scientific to tap riskier debt markets to finance expansion. As part of its strategic shift, the company recently sold $175 million worth of bitcoin, signaling a clear pivot away from its mining roots toward AI-focused hosting services.

Industry-wide, AI infrastructure companies have already raised $17.9 billion in junk bonds this year, according to Bloomberg. Core Scientific is currently developing six data centers designed specifically for AI workloads. These facilities are tied to a long-term, 12-year lease agreement with CoreWeave, which could generate approximately $10 billion in revenue.

This financing effort follows similar large-scale deals in the sector, including $6.7 billion raised by projects linked to Google-backed data centers and CoreWeave. Meanwhile, Edged Compute is marketing $1.3 billion in bonds to support AI facilities leased to CoreWeave and an Alibaba affiliate.

Core Scientific stated that proceeds from the bond sale will be used to repay existing debt, strengthen financial reserves, and fund construction costs across multiple states if needed. The company still holds fewer than 1,000 bitcoin, according to CFO Jim Nygaard.

Founded in 2017, Core Scientific once ranked among North America’s largest bitcoin miners but filed for Chapter 11 bankruptcy in late 2022 due to rising energy costs and declining crypto prices. After emerging from restructuring in January 2024, the company refocused on AI hosting, where profit margins are more attractive.

With bitcoin mining becoming less profitable after the 2024 halving and rising operational costs, many miners are repurposing their infrastructure for AI. Core Scientific’s early pivot has boosted investor confidence, with shares up nearly 42% this year despite a decline in bitcoin prices.