Core Scientific, a prominent Bitcoin mining company, recently announced plans to expand its Artificial Intelligence (AI) department significantly. This initiative appears to be a strategic move against potentially declining cryptocurrency mining profits.
Over the past five years, the firm has gradually shifted its business operations from mining to AI. This change requires considerable power resources for AI model training and large-scale projects, emphasizing the need to enhance power capacity and guarantee its reliability and efficiency.
Core Scientific has forged a 12-year contract with CoreWeave in alignment with its expansion announcement. This venture aims to provide the necessary infrastructure for machine learning operations.
The deal with CoreWeave will inject more than $3.5 billion into Core Scientific’s revenue stream over the next 12 years.
Core Scientific boosts AI sector with CoreWeave deal
The market response to this news was positive, resulting in a 30% boost in Core Scientific’s share price the following Tuesday.
CoreWeave, a privately funded firm that provides the Graphics Processing Units essential for running AI models, recently acquired around 200 megawatts of infrastructure from Core Scientific. This purchase will bolster CoreWeave’s ability to manage large-scale AI operations and further strengthen its foothold in the AI market.
Despite declaring bankruptcy earlier this year, Core Scientific has continued to mine various digital currencies since 2017. CEO Adam Sullivan, who assumed command during the company’s financial crisis, has been instrumental in restructuring the company’s financial setup. His experience as an investment banker has likely contributed significantly to this pivotal transformation.
