Core Scientific, one of the largest US Bitcoin mining companies, is betting on artificial intelligence (AI) amid recent issues related to the BTC halving.
Core Scientific announced a $3.5 billion deal with AI cloud provider CoreWeave on June 3 via X. As part of the agreement, Core Scientific will provide an additional 200 MW of infrastructure to host CoreWeave’s high-performance computing (HPC) operations.
According to the release, the transaction is expected to generate total cumulative revenue for Core Scientific of more than $3.5 billion over the initial 12-year term of the agreement. The expected average annual revenue from the contract is expected to be approximately $290 million.
Core Scientific leases 18% of total infrastructure
The infrastructure provided to CoreWeave represents a significant portion of Core Scientific’s resources, accounting for approximately 18% of our total operational infrastructure.
In addition to 745 MW of operational infrastructure. As of April 2024, Core Scientific owned 372 MW of partially built infrastructure across two Texas data centers.
This is not the first deal between Core Scientific and CoreWeave. In March 2024, Core Scientific agreed to another multi-year agreement with CoreWeave to provide up to 16 MW of data center infrastructure to support AI and HPC operations.
CoreWeave raised $7.5 billion in debt financing in May 2024.
CoreWeave, formerly known as Atlantic Crypto, was founded in 2017 by Michael Intrator, Brian Venturo, and Brannin McBee. Before launching CoreWeave, the company said none of its founders had prior experience in the cloud sector. Instead, they had a background in energy futures trading.
In May 2024, CoreWeave raised $7.5 billion in debt from Blackstone, Magnetar, and Coatue. According to the Wall Street Journal (WSJ), this increase valued the company at $19 billion.
Core Scientific’s increased bet on AI cloud infrastructure comes amid pressure related to the fourth Bitcoin (BTC) halving on April 20, 2024, when Bitcoin miner rewards were reduced from 6.25 BTC to 3.125 BTC per block. .
Since the BTC price did not surge significantly in the immediate aftermath of the halving, mining companies were looking for additional revenue streams to bolster their operations.
Related: Halving the full effect: Bitfarms cryptocurrency mining revenue falls 42% in May
“The expanded relationship with CoreWeave allows Core Scientific to diversify its business model and balance its portfolio between Bitcoin mining and alternative compute hosting, maximizing cash flow and minimizing risk while maintaining significant exposure to Bitcoin’s upside potential. We provide a path to do it.” Adam Sullivan, Core Scientific CEO, said:
The news comes just months after the company emerged from bankruptcy in January 2024 and completed a 13-month restructuring process.
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