Core Scientific, a major player in North America’s digital infrastructure, has announced a partnership with AI firm CoreWeave.
This strategic move involves a series of long-term contracts spanning 12 years, marking a notable shift for the Bitcoin mining giant.
Infrastructure arm race
In January this year, Core Scientific’s shares began trading again on Nasdaq after the company’s bankruptcy and subsequent restructuring.
By April, the company achieved a milestone by surpassing 20 exahash of energized self-mining hash rate, a result of deploying S21 miners and temporarily energizing older generation miners at financially viable data centers.
The influx of fresh cash flow allowed Core Scientific to settle $19 million in debt related to mechanics’ liens and to begin completing 72 MW of infrastructure at its Denton, Texas, data center.
This expansion is part of a larger movement to add 372 MW of capacity, contributing to its goal of maintaining over 20 exahash of hash rate.
Following April’s Bitcoin halving, which cut miner rewards by half, companies like Core Scientific have been exploring new revenue streams, and in line with this trend, other firms such as Bit Digital and Hut 8 also have diversified into artificial intelligence.
Core Scientific’s financial performance has seen a nice boost, with a reported net income of $210.7 million in the first quarter of this year, a sharp contrast to a net loss of $388,000 in the same period in 2023.
The demand is growing
The partnership with CoreWeave represents a big step for Core Scientific into the AI data center market.
Under the agreement, Core Scientific will provide approximately 200 MW of capacity to support CoreWeave’s high-performance computing (HPC) operations.
This presents a unique growth opportunity while allowing the company to maintain its position in Bitcoin mining.
Adam Sullivan, CEO of Core Scientific, expressed optimism about the collaboration, as he emphasized the ever-growing demand for high-power sites and Core Scientific’s capability to efficiently meet customer needs.
Their focus on quick and reliable solutions helps to reduce the time required for power setup compared to new data center projects, and trought this new service offer, this partnership is expected to diversify Core Scientific’s revenue streams and raise its earnings.
Match made in Heaven
The HPC infrastructure is projected to generate over $3.5 billion in revenue during the initial contract period, and based on the shared informations, the company plans to reallocate some of its Bitcoin mining capacity towards this expansion to support continuous business growth.
Many industry analysts and experts speculate that this strategic shift towards AI and high-performance computing might set a precedent for other Bitcoin mining firms, because the diversification into AI not only means more revenue streams but also mitigates risks associated with the volatility of cryptocurrency markets.
