Core Scientific, a major Bitcoin mining company in the United States, is shifting focus to artificial intelligence (AI) to address challenges from the latest Bitcoin halving.
On June 3, Core Scientific announced a $3.5 billion deal with AI cloud provider CoreWeave. Under this agreement, Core Scientific will supply an additional 200 megawatts (MW) of infrastructure to support CoreWeave’s high-performance computing (HPC) operations.
The deal is expected to generate over $3.5 billion in revenue for Core Scientific over the initial 12-year contract period, averaging about $290 million annually.
Core Scientific to Rent Out 18% of Its Total Infrastructure
The infrastructure allocated to CoreWeave represents about 18% of Core Scientific’s total operating resources. As of April 2024, Core Scientific had 745 MW of operational infrastructure and 372 MW of partially completed infrastructure at its two Texas data centers.
This is not the first collaboration between Core Scientific and CoreWeave. In March 2024, Core Scientific agreed to provide up to 16 MW of data center infrastructure to support AI and HPC operations in another multi-year deal with CoreWeave.
CoreWeave’s Growth and Funding
Founded in 2017 by Michael Intrator, Brian Venturo, and Brannin McBee, CoreWeave was formerly known as Atlantic Crypto. The founders transitioned from trading energy futures to the cloud sector. In May 2024, CoreWeave secured a $7.5 billion debt facility from Blackstone, Magnetar, and Coatue, valuing the company at $19 billion.
Bitcoin Halving and Core Scientific’s Strategy
Core Scientific’s increased investment in AI infrastructure comes amid the fourth Bitcoin halving, which reduced miner rewards from 6.25 BTC per block to 3.125 BTC on April 20, 2024. With the halving not causing a significant immediate rise in Bitcoin prices, mining companies are seeking new revenue streams to sustain their operations.
Summary Review: Core Scientific’s $3.5 billion partnership with CoreWeave marks a significant shift toward AI and HPC infrastructure, demonstrating its strategy to diversify revenue amid the challenges posed by the recent Bitcoin halving. By leveraging 18% of its infrastructure for this deal, Core Scientific aims to generate substantial and steady income over the next 12 years. As the cryptocurrency market continues to evolve, mining companies like Core Scientific are increasingly exploring innovative avenues such as AI to sustain and grow their operations.
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