Core

Bitcoin

April

Core Scientific, one of the largest Bitcoin mining companies in the United States, is betting on artificial intelligence (AI) amid challenges associated with the <a href="https://cointelegraph.com/news/bitcoin-halving-2024-completion-confirmed" rel="noopener noreferrer nofollow">most recent BTC halving</a>.
Core Scientific took to X on June 3 to <a href="https://x.com/Core_Scientific/status/1797799817822777652" target="_blank" rel="noopener noreferrer nofollow">announce</a> a $3.5 billion deal with AI cloud provider CoreWeave. As part of the contract, Core Scientific will provide an additional 200 megawatts (MW) of infrastructure to host CoreWeave’s high-performance computing (HPC) operations.
The announcement says that the deal is expected to generate total cumulative revenue for Core Scientific of over $3.5 billion during the initial 12-year terms of the contracts. The estimated average annual revenue from the contracts is expected to be roughly $290 million.
<h2 data-ct-non-breakable="true" id="core-scientific-to-rent-out-18-of-its-total-infrastructure">Core Scientific to rent out 18% of its total infrastructure</h2>
The infrastructure provided to CoreWeave accounts for a significant share of Core Scientific’s resources, accounting for about 18% of its total operating infrastructure.
In addition to its 745 MW of operational infrastructure. Core Scientific <a href="https://www.businesswire.com/news/home/20240416234757/en/Core-Scientific-to-Expand-its-Denton-Texas-Bitcoin-Mining-Data-Center-by-72-Megawatts" target="_blank" rel="noopener noreferrer nofollow">owned</a> 372 MW of partially built infrastructure at its two Texas data centers as of April 2024.
The latest contract isn’t the first deal between Core Scientific and CoreWeave. In March 2024, Core Scientific <a href="https://www.businesswire.com/news/home/20240306345567/en/Core-Scientific-to-Provide-CoreWeave-up-to-16-MW-of-Data-Center-Infrastructure-to-Support-AI-and-HPC-Workloads-in-Long-Term-Hosting-Contract-with-Potential-Revenue-of-More-than-100-Million" target="_blank" rel="noopener noreferrer nofollow">agreed</a> to provide up to 16 MW of data center infrastructure to support AI and HPC operations in another multi-year contract with CoreWeave.
<h2 data-ct-non-breakable="true" id="coreweave-raised-7-5-billion-debt-facility-in-may-2024">CoreWeave raised $7.5 billion debt facility in May 2024</h2>
Formerly known as Atlantic Crypto, CoreWeave was <a href="https://research.contrary.com/reports/coreweave" target="_blank" rel="noopener noreferrer nofollow">founded</a> in 2017 by Michael Intrator, Brian Venturo and Brannin McBee. The company stated that none of its founders had prior experience in the cloud sector before launching CoreWeave; instead, they came from backgrounds in trading energy futures.
In May 2024, CoreWeave <a href="https://www.coreweave.com/blog/coreweave-raises-7-5-billion-in-debt-deal-led-by-blackstone-others" target="_blank" rel="noopener noreferrer nofollow">raised</a> a $7.5 billion debt facility from Blackstone, Magnetar and Coatue. According to The Wall Street Journal, the raise <a href="https://www.wsj.com/tech/ai/coreweave-raises-7-5-billion-in-debt-for-ai-computing-push-99fd2241" target="_blank" rel="noopener noreferrer nofollow">valued</a> the company at $19 billion.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/83ee6d2f-0c2f-48d2-b6b9-45e044c48325.png">
 <figcaption style="text-align: center;">CoreWeave founders, Brannin McBee (left) and Michael Intrator. Source: WSJ
 </figcaption>
</figure>
Core Scientific’s increasing bets on AI cloud infrastructure come amid pressure associated with the fourth Bitcoin (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">BTC</a>) halving, which <a href="https://cointelegraph.com/news/bitcoin-crypto-miners-fear-cherish-btc-halving-profitability" rel="noopener noreferrer nofollow">reduced Bitcoin miner rewards</a> from 6.25 BTC per block to 3.125 BTC on April 20, 2024.
As the <a href="https://cointelegraph.com/news/bitcoin-halving" rel="noopener noreferrer nofollow">halving</a> hasn’t triggered a significant spike in BTC price in the immediate aftermath, mining firms have been looking for additional sources of revenue to power their operations.
Related: <a href="https://cointelegraph.com/news/bitfarms-bitcoin-mining-revenue-falls-forty-percent-after-halving" rel="noopener noreferrer nofollow">Halving full effect: Bitfarms crypto mining revenue falls 42% in May</a>
“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,” Core Scientific CEO Adam Sullivan said.
The news arrived several months after<a href="https://cointelegraph.com/news/core-scientific-bankruptcy-relist-shares-chapter-11-bitcoin-miner" rel="noopener noreferrer nofollow"> emerging from bankruptcy</a> in January 2024, concluding its 13-month restructuring process.
Magazine: <a href="https://cointelegraph.com/magazine/ether-etf-launch-expected-june-cz-leaves-binance-france-hodlers-digest-may-26-june-1/" rel="noopener noreferrer nofollow">Ether ETFs expected in June, CZ leaves Binance France, and other news: Hodler’s Digest, May 26 – June 1</a>

Bitcoin miner Core Scientific strikes $3.5B AI partnership

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Cointelegraph

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