Core Scientific, a prominent Bitcoin mining company in the United States, is embracing artificial intelligence (AI) to overcome the challenges posed by the recent BTC halving event.
On June 3, Core Scientific announced a groundbreaking $3.5 billion deal with AI cloud provider CoreWeave. As part of the agreement, Core Scientific will allocate an additional 200 megawatts (MW) of infrastructure to support CoreWeave’s high-performance computing (HPC) operations.
This deal is expected to generate a cumulative revenue of over $3.5 billion for Core Scientific during the initial 12-year term. The average annual revenue from these contracts is estimated to be around $290 million.
To accommodate CoreWeave’s needs, Core Scientific will provide 18% of its total operating infrastructure. In addition to its existing 745 MW of operational infrastructure, Core Scientific also owns 372 MW of partially built infrastructure in its two Texas data centers as of April 2024.
This is not the first collaboration between Core Scientific and CoreWeave. In a previous multi-year contract in March 2024, Core Scientific agreed to 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. Despite lacking prior experience in the cloud sector, the founders came from backgrounds in trading energy futures. In May 2024, CoreWeave raised a substantial $7.5 billion debt facility from Blackstone, Magnetar, and Coatue, valuing the company at $19 billion.
Core Scientific’s focus on AI cloud infrastructure is a strategic move in response to the challenges posed by the fourth BTC halving. This event reduced Bitcoin miner rewards from 6.25 BTC per block to 3.125 BTC on April 20, 2024. As the halving did not result in a significant increase in BTC price immediately, mining companies are seeking additional revenue sources to sustain their operations.
“Our expanding 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, minimize risk, and maintain significant exposure to Bitcoin’s potential for growth,” said Core Scientific CEO Adam Sullivan.
This news comes months after Core Scientific emerged from bankruptcy in January 2024, successfully concluding a 13-month restructuring process.