CORZ 5.35 + 40% Long-Term Hosting Agreements Expected to Generate Total Cumulative Revenue for Core Scientific of More Than $3.5 Billion During Initial 12-Year Contract Terms
Positions Core Scientific as a Leading Player in the AI Data Center Space
Core Scientific, Inc. (NASDAQ: CORZ) (“Core Scientific” or the “Company”), one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America, today announced the signing of a series of 12-year contracts with CoreWeave, the AI Hyperscaler.
Under the terms of the agreements, Core Scientific will deliver approximately 200 megawatts (“MW”) of infrastructure to host CoreWeave’s high-performance compute (“HPC”) operations. Core Scientific will modify multiple existing, owned sites to host CoreWeave’s NVIDIA GPUs. The site modifications are expected to commence early in the second half of 2024 and achieve operational status in the first half of 2025.
“Our new contracts with CoreWeave position us to transform our hosting business and our earnings power by capturing exciting growth opportunities in AI compute, one of today’s most dynamic technology segments, while also maintaining our strong bitcoin mining franchise,” said Adam Sullivan, Core Scientific’s Chief Executive Officer. “As demand for ready, high-power sites continues to outpace supply, we believe Core Scientific is well positioned to meet customer needs with a much shorter time to power than greenfield data center projects. 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, positioning us to maximize cash flow and minimize risk while maintaining our significant exposure to bitcoin’s upside potential.”
“The agreements announced today also provide CoreWeave with options over the next 60 to 90 days to further expand its hosting footprint with Core Scientific at additional select sites, and we are continuing discussions with other potential clients regarding additional HPC hosting contracts to capitalize on our significant pipeline of powered real estate. We are capitalizing on one of the largest high-power digital infrastructure portfolios that we will continually seek to expand to deliver significant, resilient and sustainable value for our shareholders,” Mr. Sullivan added.
Per the agreements, all capital investments required to modify Core Scientific’s existing infrastructure into cutting-edge, application-specific data centers customized for dense HPC will be funded by CoreWeave. An estimated $300 million of the capital investments associated with Core Scientific-owned infrastructure will be credited against hosting payments at no more than 50% of monthly fees until fully repaid. The agreements with CoreWeave provide opportunities for two renewal terms of five years each. The agreements also provide optionality for further expansion with meaningful additional megawatts at other Core Scientific sites, potentially ranking Core Scientific as one of the largest data center operators in the United States.
Core Scientific’s agreements with CoreWeave complement its current business model with the addition of an expected stable, recurring, long-term and high margin revenue stream. Moving forward, the new HPC hosting contracts will increase Core Scientific’s exposure to contracted, dollar-denominated revenue. Once the approximately 200 MW of HPC infrastructure is operational, the project is estimated to generate total cumulative revenue for Core Scientific of over $3.5 billion during the initial 12-year terms of the contracts.1 Estimated average annual revenue from the contracts is expected to be approximately $290 million. From revenue to gross margin, this is expected to enhance earnings power and drive shareholder value.
From 2019 to 2022, Core Scientific hosted thousands of CoreWeave’s GPUs in its data centers. In March of 2024, Core Scientific and CoreWeave entered a contract for HPC hosting at Core Scientific’s new Austin data center, with Core Scientific delivering 16 MW of capacity more than 30 days ahead of schedule.
With its total of 1.2 gigawatts of contracted power, Core Scientific is able to deliver nearly 500 MW of HPC power to be used for alternative compute workloads based on geographic proximity to major cities and fiber lines. 2
In connection with this expansion of Core Scientific’s HPC hosting strategy, Core Scientific intends to redeploy certain of its bitcoin mining capacity from designated HPC sites to other of its dedicated bitcoin mining sites to support business continuity and growth.
Advisors
Moelis & Company LLC is acting as financial advisor to Core Scientific. Sidley Austin LLP is acting as legal advisor to Core Scientific.
About Core Scientific
Core Scientific is one of the largest owners and operators of high-powered digital infrastructure for bitcoin mining and hosting services in North America. Transforming energy into high value compute with superior efficiency at scale, we employ our own large fleet of computers (“miners”) to earn bitcoin for our own account and provide hosting services for large bitcoin mining and high-performance computing customers at our eight operational data centers in Georgia (2), Kentucky (1), North Carolina (1), North Dakota (1) and Texas (3). We derive the majority of our revenue from earning bitcoin for our own account (“self-mining”). To learn more, visit www.corescientific.com.
Forward-Looking Statements
