Key Points
- Core Scientific, a crypto mining firm, has signed a 12-year deal with AI cloud service provider CoreWeave.
- The agreement will see Core Scientific provide infrastructure to support CoreWeave’s AI training operations.
Crypto mining company, Core Scientific, has entered into a 12-year agreement with CoreWeave, a cloud services provider specializing in artificial intelligence (AI).
Diversifying into AI
This move signifies a diversification strategy for Core Scientific, a company known for its crypto mining operations, which has recently emerged from bankruptcy. The firm is now expanding its focus into machine learning.
On June 3, the Texas-based company announced a series of contracts with CoreWeave. The latter was previously a crypto mining firm but has transitioned into providing cloud services for AI.
Details of the Agreement
The contracts stipulate that Core Scientific will supply approximately 200 megawatts of infrastructure to support CoreWeave’s NVIDIA GPU operations for AI training. The infrastructure modifications are planned to commence in the second half of 2024 and are expected to be fully operational by the first half of 2025. The deal is projected to generate over $3.5 billion in revenue.
Core Scientific CEO Adam Sullivan stated that the new contracts with CoreWeave would transform their hosting business and earnings power. He noted that this move would allow the company to tap into the dynamic growth opportunities in the AI compute sector, while still maintaining their robust bitcoin mining operations.
The company also revealed that about $300 million of capital investments in its infrastructure would be credited against hosting payments, capped at 50% of monthly fees until fully repaid. Moreover, the agreements provide options for further expansion, potentially establishing Core Scientific as “one of the largest data center operators in the United States.”
Core Scientific, founded in 2017 by Mike Levitt and Darin Feinstein, quickly gained prominence in the crypto mining industry, securing over $50 million in equity funding from investors. However, the unpredictable nature of the crypto market led to financial challenges, pushing the company to the brink of bankruptcy in late 2022. The company managed to recover from bankruptcy proceedings in early 2024.
