Core Scientific raises $3.3B in junk bonds to convert Bitcoin mines into AI data centers

Core Scientific Joins Crypto-to-AI Bandwagon with Massive Debt Raise

Core Scientific announced plans to raise $3.3 billion through a speculative-grade debt offering, marking one of the largest financing moves in the ongoing pivot from Bitcoin mining to artificial intelligence infrastructure 2

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. The senior secured notes, due in 2031, will help the publicly traded company—valued at approximately $6.27 billion—fund its transformation into a data center operator focused on high-performance computing and AI workloads 4

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The junk-bond wave sweeping through the AI infrastructure sector has already seen companies raise $17.9 billion in high-yield bonds this year, according to Bloomberg data 2

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. Core Scientific's offering follows a record-breaking $6.7 billion transaction involving Google-backed data centers and CoreWeave just days earlier, underscoring investor appetite for projects tied to investment-grade hyperscalers like Google, AWS, Oracle, and Meta.

Converting Bitcoin Mines into AI Data Centers Across Multiple States

Core Scientific revealed plans to convert a 300-megawatt Bitcoin mining operation in Pecos, Texas, into a 1.5-gigawatt AI datacenter campus 1

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. Construction began earlier this year, with the first data hall expected online in early 2027. When complete, the facility will offer roughly one gigawatt of leasable capacity—equivalent to the output of a large nuclear reactor.

The company is developing six data center facilities across Georgia, Texas, North Carolina, and Oklahoma under a 12-year contract with cloud-computing firm CoreWeave that could generate approximately $10 billion in revenue 2

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. Morgan Stanley and JPMorgan Chase are managing the debt offering, which is expected to price this week 2

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Power Consumption Challenges Drive Creative Energy Solutions

Securing adequate power remains a critical challenge for AI data centers. Core Scientific has already secured an additional 300 megawatts from local utilities and plans to supplement this with a "scalable behind-the-meter solution," though specifics haven't been disclosed 1

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. Power constraints have become such a limiting factor that major hyperscalers are exploring unconventional energy sources, from small modular reactors to Meta's recent agreement with Overview Energy to beam a gigawatt of solar power from orbit by 2030 1

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Selling Bitcoin Holdings to Fund the Pivot from Bitcoin Mining

Core Scientific has signaled its willingness to sell its entire Bitcoin holdings to finance its transformation 3

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. After selling 1,900 Bitcoin for $175 million in January, the company now holds less than 1,000 Bitcoin, down from 2,537 at the end of 2025 3

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. Despite the strategic shift, Bitcoin mining remains the firm's biggest revenue generator, earning $41.1 million in Q4 compared to $31.3 million from colocation services 3

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The Austin-based firm emerged from Chapter 11 bankruptcy in 2024, having previously described itself as one of North America's largest Bitcoin miners 3

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. The company's shares have surged 42% year-to-date, reflecting investor confidence in the surging demand for AI computing power 3

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Industry-Wide Shift Toward Artificial Intelligence Infrastructure

Core Scientific joins several former crypto miners pursuing similar strategies, including Hut 8, TeraWulf, Riot Platforms, MARA Holdings, and Bitfarms 3

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. IREN has pursued one of the most aggressive expansion strategies, spending roughly $800 million on data centers and related infrastructure in its most recent quarter 4

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The $3.3 billion deal follows a separate $1 billion credit agreement with Morgan Stanley announced in March, demonstrating Core Scientific's commitment to securing long-term financing for its buildout 4

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. Proceeds will fund ongoing development and refinance existing short-term debt, including repayment of the company's 364-day credit facility 4

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. Investors should watch how the company navigates power procurement challenges and whether the CoreWeave contract delivers projected revenues as competition intensifies for AI infrastructure capacity.