Key Points
- Core Scientific, a major US Bitcoin mining company, announces a $3.5 billion deal with AI cloud provider CoreWeave.
- This deal is expected to generate an estimated average annual revenue of approximately $290 million.
Core Scientific, a significant player in the American Bitcoin mining landscape, has revealed a lucrative deal with CoreWeave, a provider of AI cloud services.
Details of the Deal
The agreement, worth $3.5 billion, will see Core Scientific contribute an extra 200 megawatts (MW) of infrastructure to facilitate CoreWeave’s high-performance computing (HPC) operations.
The deal is projected to generate over $3.5 billion in total cumulative revenue for Core Scientific during the initial 12-year terms of the contracts, with an estimated average annual revenue of around $290 million.
Allocation of Resources
The resources given to CoreWeave represent a significant portion of Core Scientific’s total infrastructure, around 18%. This is in addition to its existing 745 MW of operational infrastructure and 372 MW of partially constructed infrastructure at its two Texas data centers as of April 2024.
This isn’t the first time Core Scientific and CoreWeave have collaborated. In March 2024, Core Scientific agreed to provide up to 16 MW of data center infrastructure to support CoreWeave’s AI and HPC operations.
CoreWeave, initially known as Atlantic Crypto, was established in 2017 by Michael Intrator, Brian Venturo, and Brannin McBee. Despite the founders having backgrounds in energy futures trading rather than the cloud sector, the company raised a $7.5 billion debt facility in May 2024 from Blackstone, Magnetar, and Coatue.
Core Scientific’s increasing investment in AI cloud infrastructure comes amidst challenges associated with the fourth Bitcoin halving, which saw Bitcoin miner rewards drop from 6.25 BTC per block to 3.125 BTC in April 2024.
“Our expanding relationship with CoreWeave creates a pathway for Core Scientific to diversify our business model and balance our portfolio between Bitcoin mining and alternative compute hosting,” said Core Scientific CEO Adam Sullivan.
This announcement comes a few months after Core Scientific emerged from a 13-month restructuring process in January 2024.
