Core Scientific (CORZ) is set to raise $3.3 billion through a junk bond sale to finance its strategic pivot from cryptocurrency mining to artificial intelligence (AI) data center operations. The company is constructing six AI data centers, which will be leased to CoreWeave under a 12-year agreement, with projected revenues of approximately $10 billion. This move comes as demand for AI services strains existing infrastructure, prompting firms to seek funding from riskier debt markets.

The bond issuance is part of a broader trend in which AI infrastructure-related borrowers have raised $17.9 billion in high-yield debt this year. Core Scientific’s transition highlights the growing profitability of AI over its previous crypto operations, especially as the recent halving event has reduced bitcoin mining rewards. The company aims to use the proceeds to repay existing debts, cover construction costs, and build reserves, signaling the capital-intensive nature of AI development.

For market professionals, Core Scientific’s successful bond sale could indicate strong investor confidence in AI infrastructure, potentially leading to increased interest in similar high-yield offerings within the sector.

Source: coindesk.com