Core Scientific to Earn $3.5 Billion from AI Computing Deal

The mining company Core Scientific has inked a 12-year contract with AI firm CoreWeave to provide infrastructure with a capacity of 200 MW for hosting Nvidia graphics processors.

Tonight, we announced that Core Scientific will be providing an additional ~200 MW of infrastructure to host @CoreWeave #HPC services.

— ~200 MW of infrastructure for HPC compute
— Estimated to generate total cumulative revenue for Core Scientific of over $3.5 billion during the… pic.twitter.com/GWRaJuJdZs

— Core Scientific (@Core_Scientific) June 4, 2024

The company’s data center upgrade to support high-performance computing (HPC) is expected to be completed in the first half of 2025.

Core anticipates that annual revenue from hosting services for CoreWeave will be approximately $290 million, reaching $3.5 billion over the contract’s duration.

The AI company will invest $300 million in modifying the bitcoin miner’s infrastructure, which will be credited against future payments.

“As demand for ready-to-use high-power facilities continues to outpace supply, we believe we are well-positioned to meet customer needs with much shorter power connection times than greenfield data center projects,” said Core CEO Adam Sullivan.

CoreWeave has been a hosting client since 2019. Sullivan noted that the significant expansion of collaboration will help diversify the business model by balancing bitcoin mining with hosting alternative computations. This will allow for maximizing cash flow and minimizing risks, he added.

According to the statement, Core has contracted capacities of 1.2 GW, of which up to 500 MW could potentially be allocated to HPC.

In April, CoinShares experts, following the recent halving, suggested that miners would compensate for reduced income by expanding into the AI sector.

At the end of the month, industry companies reported a significant decline in bitcoin production following the reduction of the block reward from 6.25 BTC to 3.125 BTC.

Back in January, Core emerged from bankruptcy proceedings.

In March, Sullivan, discussing the company’s strategy post-halving, announced plans to purchase mining equipment from struggling enterprises. The firm is in a strong position in terms of infrastructure, he noted.