Core Scientific, a Bitcoin miner, secures a 12-year contract to provide 200MW of power for machine learning.
Core Scientific, a leading crypto mining firm, has entered into a 12-year partnership with CoreWeave, a cloud provider, to supply resources for artificial intelligence (AI) training. This move signifies a shift in the crypto mining sector, as companies like Core Scientific are expanding their interests into AI and machine learning.
In a press release issued on June 3rd, Core Scientific, based in Texas, announced that it has signed a series of long-term contracts with CoreWeave, a former crypto mining company that now specializes in providing cloud services for AI applications. As per the agreement, Core Scientific will allocate around 200 megawatts of infrastructure to support CoreWeave’s NVIDIA GPU operations for AI training. The modifications to the infrastructure are scheduled to commence in the latter half of 2024 and will be fully operational by the first half of 2025. Core Scientific anticipates that this deal will generate over $3.5 billion in revenue.
Under the terms of the agreement, Core Scientific will credit approximately $300 million of its infrastructure capital investments against hosting payments. These credits will be capped at 50% of monthly fees until fully repaid. The contracts also include provisions for potential expansion, which could position Core Scientific as one of the largest data center operators in the United States.
Founded in 2017 by Mike Levitt and Darin Feinstein, Core Scientific quickly gained prominence in the crypto mining industry, securing over $50 million in equity funding from investors. However, due to the volatile nature of the crypto market, the company faced financial challenges and was on the verge of bankruptcy in late 2022. Notable contributors to its financial struggles included FTX, Celsius Network, and Three Arrows Capital. However, in early 2024, Core Scientific successfully emerged from bankruptcy proceedings.
This partnership with CoreWeave marks a strategic move for Core Scientific, as it seeks to diversify its operations and capitalize on the growing demand for AI and machine learning. As evidenced by Nvidia’s recent financial success and stock split, the intersection of AI and cryptocurrencies presents significant opportunities for growth and innovation in the market.
