Core Scientific, one of the leading Bitcoin mining companies in the United States, is placing its bets on artificial intelligence (AI) in response to the challenges posed by the recent BTC halving event.
On June 3, Core Scientific announced a $3.5 billion deal with AI cloud provider CoreWeave. Under the agreement, Core Scientific will provide an additional 200 megawatts (MW) of infrastructure to support CoreWeave’s high-performance computing (HPC) operations.
According to the announcement, this deal is projected to generate a total cumulative revenue of over $3.5 billion for Core Scientific over the initial 12-year term of the contracts. The estimated average annual revenue from these contracts is expected to be approximately $290 million.
In terms of infrastructure, the resources provided to CoreWeave make up a significant portion of Core Scientific’s total operating infrastructure, accounting for about 18% of the company’s overall capacity. As of April 2024, Core Scientific owned 745 MW of operational infrastructure and had an additional 372 MW of partially built infrastructure at its two Texas data centers.
This recent contract is not the first collaboration between Core Scientific and CoreWeave. In March 2024, the two companies agreed on a multi-year contract where Core Scientific would provide up to 16 MW of data center infrastructure to support AI and HPC operations.
CoreWeave, formerly known as Atlantic Crypto, was founded in 2017 by Michael Intrator, Brian Venturo, and Brannin McBee. Interestingly, none of the founders had prior experience in the cloud sector before launching CoreWeave. Instead, they came from backgrounds in trading energy futures. In May 2024, CoreWeave raised a $7.5 billion debt facility from Blackstone, Magnetar, and Coatue, resulting in a valuation of $19 billion for the company.
Core Scientific’s increased focus on AI cloud infrastructure comes at a time when Bitcoin mining firms are facing pressure due to the fourth BTC halving. This event reduced the miner rewards from 6.25 BTC per block to 3.125 BTC on April 20, 2024. As the halving did not lead to a significant increase in the BTC price immediately after, mining companies have been seeking additional sources of revenue to sustain their operations.
“Our growing relationship with CoreWeave allows Core Scientific to diversify our business model and balance our portfolio between Bitcoin mining and alternative compute hosting. This positions us to maximize cash flow and minimize risk while still maintaining significant exposure to Bitcoin’s potential for growth,” said Core Scientific CEO Adam Sullivan.
This news comes several months after Core Scientific emerged from bankruptcy in January 2024, concluding a 13-month restructuring process.