Miner Core Scientific will start leasing capacity to AI company CoreWave

The 12-year agreement will generate more than $3,5 billion for the miner

04.06.2024 - 08:45

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What’s new? Miner Core Scientific has signed a 12-year contract with CoreWeave, a company that specializes in generative artificial intelligence technology. The average annual revenue from the agreement, under which Core Scientific will lease its AI computing capacity, will be about $290 million, with total cumulative revenue over the entire period exceeding $3,5 billion.

Press release

What else is known? To accommodate CoreWeave’s production capacity, miner Core Scientific plans to build 200 MW of infrastructure and upgrade existing sites. The sites are expected to be operational by the first half of 2025.

The agreement will allow Core Scientific to diversify its business model by getting into hosting AI computing capacity in addition to bitcoin mining. According to CEO Adam Sullivan, this will maximize cash flow and minimize risk while still being able to capitalize on potential BTC appreciation.

Under the contract, CoreWeave will fund all capital expenditures required to modify Core Scientific’s existing infrastructure. To offset the costs, CoreWeave plans to provide Core Scientific with approximately $300 million, which will be gradually deducted from its monthly hosting fees.

In the wake of the April 20 halving of the reward for mining blocks on the Bitcoin network, many miners are looking to boost revenue by partnering with AI companies, among them Bit Digital and Hut 8.

Miner Core Scientific has started leasing equipment to AI startups

The initiative is launched against the backdrop of declining revenues for BTC mining industry participants after the halving

Core Scientific posted a net profit of $210,7 million in Q1; it recorded a loss of $388 000 in the same period last year. In January this year, the company successfully emerged from bankruptcy through restructuring and re-entered the NASDAQ under the old ticker CORZ. The securities are trading at $4,87, having added 2,53% overnight. Monthly growth amounted to 50%.

At the end of May, Singaporean miner Bitdeer signed an agreement for $150 million with the issuer of USDT stablecoin. It will use the funds to expand its business.

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