TLDR
- A remarkable partnership has been sealed as Core Scientific and CoreWeave agree on a substantial $6.7 billion deal, promising enhanced collaboration over 12 years.
- This ambitious deal will see Core Scientific supplying CoreWeave with an impressive 112 additional megawatts of cutting-edge computing infrastructure.
- Following the announcement, a surge in investor confidence led to an 18% increase in Core Scientific’s stock valuation.
- Signifying a major strategic pivot, the deal reflects Core Scientific's transition from focusing solely on bitcoin mining to a bold new emphasis on AI infrastructure.
- CoreWeave steps forward to fund the extensive upgrades to Core Scientific’s existing systems, paving the way for state-of-the-art facilities.
As a dominant force in bitcoin mining, Core Scientific has declared a noteworthy enhancement of its strategic partnership with CoreWeave. This transformational $6.7 billion agreement, spanning 12 years, underscores Core Scientific’s strategic switch from cryptocurrency mining to focusing on artificial intelligence infrastructure. , an AI-focused cloud provider.
Under this fresh accord, Core Scientific will boost its high-performance computing capabilities by 112 megawatts, increasing their total to 382 MW. This expansion is critical for accommodating CoreWeave’s NVIDIA GPUs, essential for AI and machine learning tasks.
Expected to elevate their revenue by an additional $2 billion over the next dozen years, this expansion supplements their projected $4.7 billion from current deals, marking a cumulative potential revenue reaching $6.7 billion, with implementations kicking off in early 2026.
Adam Sullivan, CEO of Core Scientific, emphasized,
“Our collaboration with CoreWeave now encompasses 382 megawatts of high-power computing, reflecting the persistent demand and our expertise in delivering exceptional data center infrastructures.”
Triggered by the announcement, Core Scientific’s share prices catapulted by about 18%, with recent trades at $9.74.
CoreWeave is set to finance every capital expenditure to refine Core Scientific’s infrastructure into modern, application-specific hubs required for dense high-performance computing. These upgrades are scheduled to start in late 2024, with full operation by early 2026.
At a time when bitcoin miners are reshaping their spaces for AI clientele, this expansion emerges amid a decline in crypto mining profitability, particularly after the latest bitcoin halving.
This maneuver by Core Scientific is part of a larger industry trend, as companies smartly pivot their facilities and power setups to meet the burgeoning demand for AI processing power.
Transforming bitcoin mining setups into AI-capable infrastructures is not without hurdles. Analysts from Needham highlighted in a recent report that significant overhauls are crucial for aligning existing mining facilities with new high-performance computing requisites.
Despite these obstacles, Sullivan remains buoyant about Core Scientific’s prospects, spotlighting the integration of Block’s advanced 3-nanometer ASIC chip and the flourishing HPC operations as pillars of the company’s expansion plans.
This agreement marks a comeback story for Core Scientific. By January 2024, the firm was recovering from bankruptcy pressures and lender tensions. Since its stock market revival that month, Core Scientific’s shares have climbed 140%, fueled largely by its dedicated venture into the AI sector.
The firm continues its bitcoin mining endeavors. In July, Core Scientific recorded mining 411 BTC from its assets, utilizing about 172,000 BTC miners, achieving a total hash rate of 20.1 EH/s.
Meet Oliver, Editor-in-Chief of Blockonomi, and the visionary behind Kooc Media, a progressive media house in the UK. He champions open-source tech, blockchain evolution, and a free, fair internet.
