Core Scientific's share price soared 140% after its January comeback, driven by a swift shift to AI and a $6.7B deal with CoreWeave.
The new $6.7B deal with CoreWeave adds 112 megawatts of computing power and aims to generate $2B in revenue over 12 years.
Despite a 7.5% stock drop, Core Scientific’s market value is around $1.5B, with a recent $1.02B buyout offer declined.
What was once a bankrupt and at-odds firm with its lenders, Core Scientific has been on its second coming since the January comeback of the stock market. The company's share price has surged by 140% following a pivot that is rapid to artificial intelligence.
It extended a deal with Nvidia-backed AI infrastructure startup CoreWeave. This new agreement, pegged at $6.7 billion, reflects one of the largest spends on high-performance computing and artificial intelligence.
https://twitter.com/Core_Scientific/status/1820795504302620834 Major Deal with CoreWeave
Under this agreement, Core Scientific will supply an additional 112 megawatts of computing power to CoreWeave. This enhancement will boost CoreWeave’s AI operations. Over the course of twelve years, $2 billion in revenue is anticipated from the arrangement.
It builds on an existing $4.7 billion contract. By mid-2026, Core Scientific plans to provide approximately 382 megawatts of infrastructure to CoreWeave, with potential expansions of 118 megawatts at other sites.
Shifting Focus Amid Market Changes
This strategic shift follows a period of declining profitability in bitcoin mining. The halving event in April reduced mining margins, prompting many miners to explore AI infrastructure. Core Scientific’s CEO, Adam Sullivan, highlighted the company’s focus on digital infrastructure. He emphasized the shift’s role in diversifying revenue streams and meeting growing AI demands.
However, transitioning from Bitcoin mining to AI is not straightforward. The requirements for AI infrastructure differ from those for Bitcoin mining. Analysts from Needham noted that most existing mining infrastructure would need complete redevelopment to support high-performance computing (HPC).
Notable Milestones and Market Reactions
Moreover, Core Scientific’s growth trajectory includes notable milestones. The company recently declined a $1.02 billion buyout offer from CoreWeave. Core Scientific’s current market value stands at about $1.5 billion. Despite a 7.5% stock drop amid global market declines, some analysts view this as a buying opportunity for mining stocks.
Additionally, other Bitcoin miners, such as Bit Digital, are also pivoting to AI. Bit Digital now earns roughly 27% of its revenue from AI services. The company signed a three-year deal to supply Nvidia GPUs for an Icelandic data centre, projecting $92 million in annual revenue. This move was partly funded by liquidating crypto holdings.
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